Tim Elliott
Welcome to Lawgical, the UAE’s first and only legal podcast. My name is Tim Elliott. Lawgical comes to you from the Dubai-based legal firm HPL Yamalova & Plewka. And as ever, here is Ludmila Yamalova, the Managing Partner. Nice to see you.
Ludmila Yamalova
Good to see you too, Tim.
Tim Elliott
This time, Ludmila, on Lawgical, the Federal Decree Law Number 13 of 2022. This is new, Ludmila. What do we know about the unemployment insurance that’s coming in?
Ludmila Yamalova
It is new indeed, and it was just issued in September of 2022 and published in the Official Gazette just a few days ago. So it truly is hot off the press—one—and two, as you rightfully said, it’s so new that this has never existed before in the UAE. So there is now officially an unemployment insurance law.
Previously, it had been mentioned or announced in the press, but there wasn’t an actual legal authority behind it. It was just an announcement of something to come. Now, it has come. The law is here, and the law is, as you said, Number 13 of 2022, called “Regarding Insurance for Unemployment.”
What we know is that this is the main substantive law, but at a high level, it is not extremely detailed yet. It essentially sets out the legal framework of how this unemployment insurance will work in the UAE, but further details and specifics will be spelled out in executive regulations and other decisions, which will follow later. In fact, the law itself has a number of references throughout to certain aspects that will be detailed in future regulations.
So, let’s consider this podcast as series one or part one of the unemployment insurance topic for the UAE.
At a high level, the purpose of the law is to guarantee income for employees during periods of unemployment—at least a partial guarantee—and to provide social security for the UAE labor market. Ultimately, all of this is done to attract and retain some of the world’s best talent, allowing the UAE to maintain its global competitive advantage.
Tim Elliott
What does the law detail?
Ludmila Yamalova
The law details a number of aspects: the eligibility of employees, the conditions for eligibility, the amount of compensation, the compensation period, and the types of benefits, along with a few other nuances.
In terms of eligibility, this unemployment insurance will be available for both private and public sector employees. That’s important because one of the big questions was which sector of employees it would apply to.
There are a few exclusions:
- Owners of companies or investors.
- Domestic workers.
- Part-time employees.
- Employees below the age of 18.
- Retirees receiving a pension.
In terms of conditions for eligibility, employees must have been contributing to the insurance plan or policy for at least 12 consecutive months. That’s important. It’s not tied to 12 months of employment but rather 12 months of contributions. Based on this principle alone, we won’t see unemployment insurance being tapped into for at least 12 months from today.
Another limitation is that employees can only benefit if they were not terminated for disciplinary reasons. Even if you’ve been contributing, if you’re terminated for good cause, you won’t qualify.
Additionally, the law prohibits claims based on fraudulent information or scams. This likely draws on experience from other jurisdictions where unemployment insurance has been exploited, such as working off the books while claiming unemployment insurance.
Tim Elliott
What about amounts and time periods?
Ludmila Yamalova
For now, the compensation is set at 60% of the contribution salary, capped at AED 20,000 per month. However, we don’t yet have a precise definition of “contribution salary.” Is it your monthly salary, or does it refer to a specific amount contributed? That will be clarified in future regulations.
The compensation is limited to a three-month period.
Tim Elliott
Does this impact end-of-service benefits?
Ludmila Yamalova
No, it does not. This law is independent of the UAE labor law. Employees will still be entitled to end-of-service benefits and any other dues from their previous employer. The unemployment insurance is an additional safety net to help employees transition while they look for a new job.
Tim Elliott
Is this now in effect?
Ludmila Yamalova
Yes. This law became effective as of its publication in the Official Gazette on September 29, 2022. Legally, the framework is in place, but practical implementation remains to be seen.
We’ll need further implementing regulations to address questions like:
- Who contributes to these policies—the employer, the employee, or both?
- What are the mechanisms for applying and contributing to unemployment insurance?
It’s possible that it will be a shared responsibility between employers and employees, similar to models in other jurisdictions. For now, we await further clarity.
Tim Elliott
What’s your take on the potential impact on the UAE labor market?
Ludmila Yamalova
It’s a bold and positive step. Combined with the recent immigration law reforms, which offer new visa types and greater flexibility, this law can help attract and retain top talent.
For instance, losing a job no longer means a rush to leave the country. Employees can stay longer, supported by extended visa options and unemployment insurance, to find a job that’s the right fit. This encourages stability and aligns with the UAE’s goal of maintaining a competitive labor market.
Tim Elliott
That’s another episode of Lawgical, this time covering Federal Decree Law Number 13 of 2022 regarding insurance for unemployment. Our legal expert, as always, Ludmila Yamalova, Managing Partner here at Yamalova & Plewka. Thank you.
Ludmila Yamalova
Thank you, Tim. Always a pleasure.
Tim Elliott
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