Tim Elliot: Welcome to Lawgical, the U.A.E.’s first, and still the only, regular legal podcast. My name’s Tim Elliot. Lawgical comes to you from the Dubai-based legal firm, HPL Yamalova & Plewka. And as always, here is the Managing Partner, Ludmila Yamalova. Nice to see you.
Ludmila Yamalova: Good to be here with you, Tim.
Tim Elliot: Today it’s end-of-service benefits for domestic workers in the United Arab Emirates, Ludmila, and before we get to the nitty gritty, if you like, of the subject, just define the term domestic worker. How is it defined under the law?
Ludmila Yamalova: Domestic workers, in general terms, is define as those employees who work in the house providing services to the family of individuals. Perhaps it is less about the specific definition of the term, domestic workers, and defined more in terms of examples who are considered to be domestic workers. They could be nannies. They could be chauffeurs or drivers, chefs, gardeners, cleaners, maids, teachers. They could even be personal trainers and nurses. They are defined, generally speaking, as domestic workers. But ultimately the defining parameter is that these are people who usually work and live in the house, representing, taking care, and servicing the needs of the people who are families. In most cases, they live in the house. They don’t have to live in the house, but certainly whatever work they do, it is for the domestic and personal needs of a family and family members.
Tim Elliot: Okay. We’ve talked about domestic workers’ rights a number of times on Lawgical, but this is new, almost breaking as it were. There is no mention of end-of-service benefits in the new law, Federal Decree 9 of 2022 on domestic workers. That came into effect at the end of last year. Now this was something you remarked on at the time. If I remember rightly, you said it was a point that you wanted to come back to in another podcast, so here we are.
Ludmila Yamalova: Yes. Here we are. Just to set the stage on why we are talking about end of service for domestic workers, it is because, as we have discussed before, in the U.A.E. there is a concept of end-of-service gratuity or entitlements, at least for the most part, for all employees, or at least historically it was for all employees, but in particular for the employees of the private sector and the public sector. This is the U.A.E.’s version of some type of a pension plan or a severance plan, and that is for expats. This only applies to expats, not so much the U.A.E. nationals, but this is the U.A.E.’s version for expats to provide for some kind of additional payment plan and some sort of compensation as a reward for their employment in the U.A.E. In more technical terms, in the U.A.E. we refer to this as end of service, EOS, or gratuity.
Until recently, and maybe you recall, we were one of the first ones to highlight this, but until recently the perception was that end-of-service benefits only really apply to employees in the private sector and the public sector.
In the public sector, historically government employees and public sector employees have better benefits or perhaps a little more generous benefits than employees in the private sector. But the private sector employees have all been entitled to what is called the end-of-service gratuity, and that is at the end of their employment and in relevant terms, as long as they worked for the company for at least one year they will be entitled to end of service. End of service in most cases is calculated as 21 days of basic salary for every year of service. So, when you have worked for about a year, at the end of your employment you are entitled to an additional amount of about three weeks of your monthly salary for every year of service.
But for the longest time, and this is important to highlight, for the longest time there wasn’t really a specific law – in fact, the employment law that sets out end of service for the private sector is the previous version of the employment law and it specifically excluded domestic workers. Yet, until 2017, there wasn’t a specific employment law that governed domestic employees or domestic workers. So, until about 2017, there was only employment law that covered the private sector, and then there was the HR law, basically the employment law that covers the government employees, but both laws, more or less specifically, excluded domestic employees. Yet, there was no specific law that would cover domestic employees.
Now in 2017 a law was issued, and that was Federal Law 10 of 2017, and this was a specific employment law for domestic employees, which was great, because it set out all the requirements and entitlements and obligations as they pertain to domestic employees in the U.A.E. For the most part and in most cases, it mirrors or trails most of the benefits that are also set out in the employment law for the private sector, for example, holidays, health insurance, and the treatment of employees, and so on and so forth. In many ways, it had a lot of similar benefits and right that were given to domestic employees as those provided for employees in the private sector.
Among other things, and more importantly, that same law also spelled out the entitlement to the end-of-service benefits for domestic workers. That was a groundbreaking provision because until that time, most domestic workers did not even know that they were entitled to end of service. But even when the law came into effect, it was not talked about very much.
I think it was not until perhaps we started doing this podcast a few years ago and started raising this awareness, and this created a lot of exuberance and excitement in the market because, all of a sudden, domestic employees realized that in addition to obtaining their salary and a ticket home, they also have this other payment that they were entitled to at the end of their employment.
Furthermore, that particular provision also spelled out that since most domestic employees have an employment contract for two years, the gratuity had to be paid to them every two years, irrespective of whether they continued their employment or not.
Unlike other employees in the private sector, who are entitled to gratuity or end of service, by definition it comes at the end of your employment. If you worked for 10 years, you would not be receiving it until you finished your employment at the end of 10 years.
For domestic employees, it was somewhat different. The law stated that every two years at the end of the contract, the domestic employees were entitled to receive, and therefore employers were obligated to pay them their end of service, and the end of service or gratuity was calculated as 14 days for every year of service. In other words, at the end of every two years, they would receive an additional amount of about four weeks of salary, which is about an extra month of salary. So, every two years, let’s say when the nanny or a maid wanted to renew her contract, or go home to see her family, then she, by law – it wasn’t always practiced – but by law, employers were required to pay the end of service for the previous two years. That is how it was from 2017 based on Federal Law 10 of 2017.
Since we started covering this, there was a lot of excitement and domestic employees became more informed. We know firsthand this was a big shock to a lot of employers because they were not aware of the law and when this was brought to their attention, obviously many of them either had not planned and not budgeted or just were not really happy about it. Be it as it may, as time went on and people were more and more informed, domestic employees were actually claiming these benefits, and whenever there were disputes it would go to court, and the courts would always award the end of service or gratuity to the domestic employees.
Then last year in 2022, there was a new law that came out on domestic employees and that was Law 9 of 2022 on domestic workers. This law came into effect in December of 2022 and this law specifically cancelled out the previous law, which was Law 10 of 2017 on domestic workers which we have just discussed. It was the previous law that set out this framework for the entitlement and the payment of gratuity for domestic workers.
This new law that was issued and came into effect in December of 2022 cancelled out the previous law. That in and of itself, as we have seen so much legislative evolution and development in the last two years in particular, maybe almost three years now, since the beginning of COVID, that most of these regulations have been perhaps significant steps forward in terms of updating the laws to the current societal needs. The expectation was that this new law for domestic employees would also introduce new benefits, new rights, and would otherwise be a more favorable law.
For all intents and purposes, I have to tell you, it is a much better law in terms of how it is structured and how it is defined. It is a lot more clear than the previous law. It is targeted on what are the entitlements and these are the rights of domestic employees, as opposed to the previous law which talked a lot about the recruitment agencies and the rights between recruitment agencies and employers, or the families that would be hiring the domestic employees and was a little less clear about the rights and the entitlements for domestic employees.
This new law, structure wise, is a lot more clear and a lot more helpful and insightful to domestic employees in terms of what they can and cannot do, and equally so, the limitations and restrictions on employers, be it families, direct employers, or recruitment agencies. In that way, it is quite a helpful law.
With regard to the end of service however, article 22 of that law, the 2022 law, which is Law 9, talks about end of service. The article states that any kind of end of service entitlements will be discussed and addressed in a future decision by the U.A.E. Cabinet, which ultimately adopts rules and regulations for calculations and payment of end of service or gratuity for domestic workers. That is basically what article 22 of this Federal Law 9 of 2022 states, that with regard to end-of-service benefits, it will be further clarified and further set out and defined in a future U.A.E. Cabinet Resolution.
That Cabinet Resolution has since been introduced in January, just a few months after the main law came into effect. So, in January of 2023, the U.A.E. issued new Cabinet Resolution 106 regarding domestic employees.
Remember, there is the main law, which is Law 9 of 2022, and now there is this resolution to add on or clarify the main law, which is Cabinet Resolution 106. This resolution, however, does not state anything about end of service. It doesn’t make any kind of mention of end of service, period, let alone about how to calculate and pay end of service. If you recall in the main law, which is Law 9 of 2022, the article 22 mentions that the future Cabinet Resolution will discuss and set out regulations for calculation and payment of end of service.
Tim Elliot: Sure. So, if – I’m trying to get my head around this. So, if it’s not referred to, you’re thinking, is this to come? But you can only go with the law as you see it at that point in time. So, this is not referred to at all?
Ludmila Yamalova: Exactly.
Tim Elliot: It’s not in the law.
Ludmila Yamalova: It’s referenced in general terms in the main law to be further clarified and explained in the future law, and the future law came out, but it makes no mention or no reference to end-of-service entitlements for domestic employees.
Tim Elliot: So, from that, do you take, since it’s not yet been referenced, that you have no right to an end-of-service entitlement?
Ludmila Yamalova: Exactly. Correct. There is no more legal authority that exists today on the basis of which a domestic employee can claim gratuity. This is because in law, if you are going to make a claim for a right, that right has to exist either in contract or in law. In law, there has to be a law for you to reference to. As I mentioned earlier, the previous law from 2017, that was Law 10 of 2017, is no more because the later law, which was issued in 2022, Law 9, that law specifically basically cancels out, erases the previous law from 2017. The previous law and the provisions related to end of service and how they are calculated and how they were to be paid is basically no more. Think of it as a document that no longer exists or is erased. That is ultimately the effect of it. While we know a lot of domestic employees learned about the entitlement, the gratuity, for them in the last several years and many have claimed and many are still expecting that to be the case, if they were to claim that today, there is no more valid legal authority on which they can rely to make that request or that claim.
Obviously, there are a few nuances to this. Perhaps there will be another resolution that would be issued to add on to this main law, and that is often the case in the U.A.E. in particular. When the main law is issued, as time goes on, they keep adding more. They either clarify or further define, or add on, or amend certain aspects of the main law. For example, there will be this one Cabinet Resolution, but the Cabinet can issue other resolutions, so there can be other resolutions that will continue to define other aspects of the main law. There is a chance there will be another resolution in the future to perhaps address this point or close this void because maybe it is unintentional. We don’t know. But as things stand today, there is nothing in the law right now to hang your hat on with regard to a claim for end of service.
Furthermore, we thought maybe since the courts, as I mentioned earlier, previously, before the law changed, there were claims before the Labor Courts by domestic employees for payment, among other things, of gratuity, and the courts were granting it. Obviously, the courts are aware of that law. We thought maybe the courts will continue, in the absence of a new law that sets out a gratuity entitlement, maybe they will extrapolate from the previous law. That was a little bit of a hope, if you will. Though to be honest with you, that would not be proper for the courts to do because courts and judges can only apply the law, and if the law does not state anything then extrapolating from something that doesn’t exist is also questionable.
But furthermore, we have since looked and reviewed a number of court judgments in the context of domestic employees’ claims, and so far, everything we have seen, there is no mention of gratuity or end-of-service entitlements for domestic employees. In other words, the law, just to summarize, the law dose not provide for end-of-service gratuity. The new law canceled out the previous law that had references and had set out a very clear formula for gratuity. Furthermore, the courts, at least based on what we have seen so far, have not been even discussing end-of-service or gratuity because obviously there is no support for it in the law.
Tim Elliot: Okay. So, this applies to anybody who’s been hired as a domestic worker who holds a domestic worker visa?
Ludmila Yamalova: Yes. Correct. That’s a great clarification. Yes. This particular law applies to the so-called legitimate domestic employees or domestic workers, because in order to work in the U.A.E. as a domestic worker, you need to be sponsored and you need to be employed as a domestic worker. That means, in relevant terms, if you are in Dubai, the authority that govern this is Tadbeer. There is a special employment contract that applies to domestic workers that is issued by Tadbeer and registered and managed through Tadbeer. Similarly, on the back of that employment contract, the specific contract for domestic employees, there is also a U.A.E. residence visa that is issued on the back of that employment contract which is also basically a domestic employee visa. This particular law, this law that we just discussed, applies to those domestic workers, the legal domestic workers, so to speak.
Anybody else who, for example, works as a domestic worker, but is on somebody else’s visa. It could be a spousal visa. It could be a company visa. And there are a lot of people like that here, because it is cheaper and easier, and let’s say some company puts them on their visa, but for all intents and purposes they are domestic employees, but they have a corporate visa. Those kinds of employees, technically speaking, that is not a legal way for them to work. But if there was a dispute in that context, they would not be able to benefit from this law. They would have to be claiming employment benefits under the main employment law which applies to the private sector, which we discussed. So, in that case, they would be entitled to end of service because they would be governed the U.A.E. labor law or employment law.
Tim Elliot: Even though their visa doesn’t really stipulate that they’re doing what they should be doing?
Ludmila Yamalova: Correct.
Tim Elliot: The law applies in that way.
Ludmila Yamalova: Great point. That is because these are two different laws. The employment laws apply to anybody who is employed in the U.A.E. The employment law and the Labor Courts will address that aspect and that issue of relationship. In other words, if you worked you are entitled to get paid. It doesn’t matter whether you worked without a visa, illegal or not. The courts don’t look at that as long as the work you perform is legal. In other words, there are certain professions that are perhaps less legal or a little more frowned upon here. But as long as it’s legal in nature, the work that you do, whether you had a visa or not, that’s outside the jurisdiction of the employment courts, and the judges don’t look at that.
But if you are working in the U.A.E. without the correct visa, that is more of an issue for the immigration authorities. On that basis, you could be fined. You could even be deported by the immigration authorities, but you would still be entitled to your employment benefits, by the way. They are separate laws. You are correct. That is a great question. In other words, for all those domestic employees who may be working on the wrong visa, there is an employment entitlement or if they want to claim end of service because they are sponsored by a company versus domestic employment, they certainly have the right and they should not be afraid of it.
But all those legally employed domestic workers, for the time being, there is no more claim for end of service.
Tim Elliot: What about – let me go back to the benefits and back to Federal Decree 9 of 2022, the domestic workers law that has superseded all others that go before, are holidays included for domestic workers and are those paid under the new law?
Ludmila Yamalova: Yes. In most cases, the new law, more or less, copies or mirrors the benefits that are set out in the previous law that was cancelled. Holidays, entitlement to holidays, which is 30 days, was provided for in the previous law, and it is, equally so, provided for in this law. Yes. Holidays, there are 30 days of holidays per year and also employers are required to allow their domestic workers to go on holidays every two years. They are not allowed to deny them. In other words, there is holiday time. They have to take holidays at the very least every two years, and if they don’t, then they have to pay the holidays that the employee does not take. They have to pay it out. Yes. That is provided for. That is in the law, and it more or less mirrors the previous provisions.
Tim Elliot: Okay. What if somebody – I mean, this is still a new law – what if somebody resigned before this law was issued, and they are just working until the end of their contract, the end of their visa, but what if they resigned before this was published in the official Gazette? I think that is the way laws are published here.
Ludmila Yamalova: As long as they are still working, so whenever they were to resign, then if you resign, you would not be working anymore beyond the one-month notice. Because if you are working, then you are still working. Therefore, when you stop working, then that is the end of your employment. If there was a dispute, the dispute would arise as of the time that your employment ends. If you end December 15, 2022, then the law is already in effect. Remember, the importance of this new law is it completely cancels out the previous law. If you resign, you are terminated, or there is a dispute that arises after the law came into effect, there is no other law to rely on. If you have a dispute, you have to cite the law, and the only valid law that exists is the Law 9 of 2022.
Tim Elliot: There is a reason I ask that. What you find here is lots of domestic workers, say a nanny, could be with the family for 20 years. That is more that feasible. That is clearly a different relationship, but it could be well be that the nanny is going to go back home, and the employer says, can we wait until X child is at a certain point in school, so a notice could have been given a good bit earlier than the usual one month. That is what I’m thinking because it strikes me that the relationship between the domestic worker and the employer is a very different relationship than between a corporate employer and a employee in most cases.
Ludmila Yamalova: For sure. It’s a lot more intimate because this person lives with you in your house or, at the very least, they take care of your family and they take care of you. It’s a very intimate relationship. For sure. Perhaps it is more familial as well. In most cases, you would hope, it’s more like a family member, and therefore you would be treated differently.
It’s interesting, to go back to your example. Theoretically, using that example, somebody who worked for a family for two years, that person should have been receiving their end of service every two years, because remember, under the previous law that came into effect in 2017, they would have been entitled to end of service as of 2017, not previously. Between 2017 and 2022, every two years they should have been receiving the end of service. That is what I thought was a beautiful mechanism in that in law to ensure that employees don’t get abused and also that they have an opportunity to save some money along the way or to received some additional money along the way. As per that law, the end of service legally had to be paid out every two years, even if you continued working for the same employer. But every time you renewed your contract, then technically speaking, under the law you should have been receiving the end of service. Hopefully, in your case, that person would have received the end of service from 2017 to 2022, at least that period of time.
More importantly, and to your point about the very intimate nature of the relationship, you would hope that if somebody has worked for you for 10 years and they have made special accommodations to stay with you and your family to help you out until your children are grown up or whoever it is in your family that needs help, that the family would do them right and would take care of them, whether the law changed or not, that benefit is always optional and the family could offer that as an optional benefit. You would hope in that case that the change in the law would not affect that relationship.
Tim Elliot: There is always hope. That’s another episode of Lawgical. This time, end-of-service benefits for domestic workers here in the U.A.E., of which there is no mention under the new law, the U.A.E. Federal Decree Law 9 from December 2022.
As always, thanks for listening and watching, or both. Thanks to our legal expert, the Managing Partner here at Yamalova & Plewka, Ludmila Yamalova, thank you.
Ludmila Yamalova: Tim, thank you. Great being here with you.
Tim Elliot: Find us at LYLAW on social media, Facebook, Instagram, TikTok, LinkedIn, YouTube. You can find all our podcasts at LYLawyers.com. If you’d like your legal question answered in an episode of Lawgical or you’d like to talk to a qualified U.A.E. experienced legal professional, click Contact at LYLawyers.com.
