Tim Elliott
Welcome to Lawgical, the UAE’s first and, we believe, still the only legal podcast. My name’s Tim Elliott. Lawgical comes to you from the Dubai-based legal firm HPL Yamalova & Plewka. And as ever, here’s the managing partner, Ludmila Yamalova.
Ludmila Yamalova
Good to see you.
Tim Elliott
Good to see you too, Ludmila. This time, it’s a very special edition of Lawgical. We recently took a quick look at the new UAE Employment Law, and today we want to dive deeper because there’s a lot to discuss. To make this easier to digest, we’ve broken it down into six relatively easy pieces. Let’s move on to part two and look at the types of work and employment contracts under the new law.
The new law allows for different types of work arrangements. There’s full-time, part-time, temporary work, and project-based work. Could you run through these for us?
Ludmila Yamalova
Certainly. The previous law almost exclusively supported full-time employment. To work legally in the UAE, you needed a full-time contract, be sponsored by one employer, and work only for that employer. The penalties for violations, such as working on the wrong visa, were severe, sometimes leading to deportation.
While the previous law vaguely mentioned hourly rates, implying some flexibility, in practice, full-time employment was the only legal arrangement. Now, the new law under Article 7 introduces various work arrangements, including full-time, part-time, temporary work, flexible work, project-based work, and potentially others.
This shift is a clear indication of the UAE’s efforts to modernize and create a more dynamic labor market. It encourages professionals to share their talents across multiple employers. For example, specialists like doctors or highly skilled professionals can now work with multiple clinics or employers. Similarly, freelancers in fields like IT, marketing, or web design can now operate independently and serve multiple clients.
This flexibility benefits both the economy and the professionals, fostering competitiveness and innovation.
Tim Elliott
Let’s talk about contracts. I understand full-time employees will now have limited contracts of up to three years. What does this mean for other types of contracts?
Ludmila Yamalova
Previously, there were two types of contracts: limited and unlimited. Limited contracts had a defined start and end date, while unlimited contracts had no defined end date. The contract type influenced benefits and entitlements, creating confusion about which was more advantageous.
The new law simplifies this. There’s now only one type of contract: the limited contract, with a maximum term of three years, renewable for equal or shorter periods. However, it’s important to note that while the term “limited contract” is retained, its application is now more employee-friendly, offering benefits similar to the old unlimited contracts.
Employees can terminate contracts at any time without losing accrued benefits, a major improvement from the previous law.
Additionally, the executive regulations, yet to be issued, will provide a standard template for these contracts. Companies will have one year from February 2022 to align their employment practices with the new law. This uniformity will reduce confusion, but I anticipate companies will retain flexibility to draft contracts that meet their specific needs.
Tim Elliott
That’s part two in our series on the new UAE Employment Law, focusing on work types and employment contracts.
Ludmila Yamalova
Thank you, Tim. It’s always insightful discussing these updates with you.
Tim Elliott
You can find us at LY Law on social media—Facebook, Instagram, LinkedIn, and TikTok. We also have a searchable library of hundreds of podcasts on various legal issues in the UAE, all free to download and listen to.
If you’d like your legal question answered in a future episode of Lawgical or need a consultation with a qualified UAE legal professional, visit lylawyers.com and click the contact button.