Finding work in the UAE requires you to sign an employment contract, which is a crucial first step. It’s critical to comprehend UAE employment contract regulations prior to signing a contract in Dubai or Abu Dhabi.
This article will examine the fundamental components of an employment contract, worker rights and benefits, general clauses, and national labor regulations. Once you’ve negotiated a fair job offer on Layboard, you must be aware of all the subtleties involved in working.
Particular attention should be paid to the following issues
Work visa requirements
One of the main principles of UAE labor law is that all employees must have a work visa. As a rule, Workers must only work for the business listed on their visa. Exceptions are part-time workers, students, and women sponsored by their employed spouses.
According to the Immigration Law, if companies employ people who do not have a work visa or have an inappropriate visa, they are subject to severe fines. For example, a business that hires workers with temporary visas or who is sponsored by another person is subject to a fine of AED 50,000 (US$ 15,300) for each such employee. In the event, the business’s operations will be halted due to repeated infractions and the cancellation of its trade license. For employees, penalties may take the form of fines, imprisonment, and even deportation with a permanent ban from entering the country. Knowing all these nuances, you can easily find handyman jobs in Dubai.
The concept of “sponsorship” in employment relationships
A company becomes a sponsor for its employee, i.e. is responsible for him/her as long as he/she is in the UAE on a company visa. The company can be held liable for the actions of the employee, even if these actions were outside the scope of the employee’s job responsibilities. When an employee’s work comes to an end, the employer has a duty to give them a ticket home and make arrangements for them to either leave the country or find another employer who has given them a visa. Should an employee pass away, the employer is in charge of arranging for the body to be sent home. If an employee has debts, the corporation may occasionally be liable for them. When a worker is compelled to depart the country, this happens because they lack the money to settle their obligation.
Validity and legality of employment contracts
Labor relations are regulated by employment contracts of the established state model, regardless of the SEZ in which the company is located. However, most companies have their own internal contracts, which vary in form and content. Agreements on commissions, bonuses, confidentiality and non-competition are just a few examples. State-issued documents have the highest legal force and are the determining instrument in the event of a labor dispute. The validity and legality of private employment contracts depends on how such documents are drawn up. Any contracts that deprive an employee of the rights and privileges established by Federal Law are considered invalid. Contracts that are too general and unfair are also considered invalid.
Termination of employment
In the United Arab Emirates, the most frequent problem is termination of job, as it is related to compensation payments. Compensation is only paid if and when the employment relationship was terminated before the expiration of the contract or vice versa, and also due to certain reasons or arbitrarily. The method of termination of employment is determined by the form of notification.
There are two forms of notification:
- Notice of dismissal. According to the Federal Law, the period in which one of the parties must be notified of the termination of employment must be one month.
- Notice of termination due to failure to fulfill contractual obligations. For such notice to acquire legal force, it needs to be supplied in compliance with the guidelines of Article 120 of the Federal Law.
According to Article 120, the company has the right to dismiss an employee immediately and potentially without providing any payments. However, if a company ends the employment relationship with an employee before the expiration of the employment contract and does not provide the required notice as described in Article 120, the employee’s dismissal may be considered illegal. In such a case, the company may pay the employee up to three times the employee’s salary as compensation. Except for salary and severance pay, no notice or payment is needed when the work connection ends at the conclusion of the employment contract.
Severance Pay
Severance pay is meant to provide compensation to employees for their service to the company and serves as a means of subsistence until they find a new job or leave the country. Employees of the company are entitled to severance pay after one year of continuous service with the company. An employee is entitled to 21 paid days (during the first five years of employment, just the basic salary is considered) for every year of labor. The severance compensation is equivalent to thirty paid days for the sixth and subsequent years of service after five years of employment.
If a worker turns in a letter of resignation and the employer has an open-ended contract, the company is required to pay 1/3 of the severance pay (i.e., 7 days)for each year of service, up to three years. If the employee has worked for the company for 3 to 5 years, they are required to pay 2/3 of the severance pay (i.e., 14 days) for each year of service.
Even in cases when the employee leaves on their own will, they still have to pay the entire amount of severance pay after five years of service (21 days for each of the five years of service and 30 days for each additional year). No severance compensation is given if the worker submits a resignation letter prior to the fixed-term contract’s expiration.
The employee’s bonus, commission, and salary increases may be included in the employee’s base salary by the court when determining the severance compensation, depending on the terms of the employment contract and the employee’s payment method.
Resolving Labour Disputes
The Labour Court has sole authority over the resolution of labor disputes. The exception is for companies registered in the DIFC. The DIFC Court has jurisdiction over such disputes. Companies located in the FTZ must first apply to the arbitration court in the place of their registration. If the case cannot be resolved through arbitration, it is referred to the Labour Court. If the labor relations with employees are properly structured, it will minimize potential losses and unnecessary liability for companies, and will help to form successful and long-term labor relations.
