New Labour Law Rules 764 (2016): Standard Offer Letters and Contracts

Employment Contracts / Offer Letters – Standardised 

The new UAE Labour Law rules have been met with a lot of positive feelings from employees. In their latest release of Labour Law Resolutions, Ministry of Labour has tried to cover 3 important aspects of Employment:

1. Ministerial Decree 764: Standard Work Contracts
2. Ministerial Decree 765: Termination of Limited Contract and Unlimited Contract
3. Ministerial Decree 766: Granting of New Work Permits 

In this post, I will try and explain the Point number 1: Standard Work Contracts.

Why this Resolution?

In the past when an employer wanted to hire prospective employees, they would interview them and present Offer Letter to hire them. The employee would come to UAE (if outside UAE), and rest of the formalities like Labour Contract, Employment visas etc were completed.

However, certain employers had a nifty tactic up their sleeves. They would provide an offer letter to an employee. Once they had resigned from their posts with the current employer or had come to UAE trusting upon the offer letter they had been offered, the employer would change the terms in the offer letter like Salary, Designation and other benefits and vital details. Employees who had already resigned or had already arrived in UAE would have nowhere to go besides accepting the terms of the ‘new employment contract.’

I had received several queries from readers with regard to such cheating and violations from their companies. I on my part had called and informed MOL about this practice. I reckon MOL would have also received thousands of similar complaints and they have come up with a right solution to address the issue.

Extract from the Ministerial Resolution 764:

Ministerial decree (764) of 2015 on Ministry of Labour-approved Standard Employment Contracts

The Minister of Labour:

Upon consulting Federal Law (8) of 1980 and its amendments governing labour relations; and Council of Ministers’ Decree (40) of 2014 on fees and penalties associated with Ministry of Labour provided services.

Decrees:
Article (1)

The employment contract specimen is henceforth adopted for use as a Standard Employment Contract. Tentative approval to admit a foreign worker for the purpose of employment in the UAE cannot be granted until an employment offer that conforms with the Standard Employment Contract is presented to and duly signed by the worker.

Article (2)

If the worker is in the UAE, the worker must duly sign the employment offer, as stipulated in Article (1) before the employer applies for tentative approval to employ the worker.

Article (3)

The Standard Employment Contract referenced in Article (1) must be used upon renewing contracts that are in force prior to the issuance of this Decree.

Article (4)

The employer must retrieve from the Ministry system a standard contract that captures exactly the terms of the employment offer and obtain the worker’s signature on the contract prior to presenting the contract for registration with the Ministry. No alteration or substitution of terms may be entered unless such alteration or substitution benefits the worker and after the alteration or substitution is approved by both the worker and the Ministry.

Article (5)

No new clauses may be added to the Standard Contract referenced in Article (1) unless they are consistent and compliant with the Ministry’s legal requirements, do not conflict with other clauses of the Standard Contract and are approved by the Ministry.

Article (6)

This Decree shall be published in the Official Gazette and become effective on January 1, 2016.

By Saqr Ghobash, Minister of Labour
Issued in Abu Dhabi on September 27, 2015

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Now, MOL through the New Labour Law Ministerial Resolution have issued the new directive that the Offer Letter have to be in a proper format as provided by the MOL and the Offer Letters will need to be registered with MOL. Once the employee is ready to join the company, the offer letter would also serve as a labour contract. The offer letter needs to be signed by the employee. MOL will not accept any tentative employment approvals for expatriates until the Offer Letter is as per the Employment Contract Template as provided by MOL.

From the effective date, upon renewing the contract, the new Employment Contract template must be used.

The Employment Contract must capture all terms as in the Employment offer Letter. There can be no alteration, substitution of Terms of the Offer Letter when it is converted into Employment Contract. If there needs to changes, it must be approved by MOL.

The companies can not add new clauses and terms to the offer letter/employment contract that are in violation to other clauses in the contract.

Here we can see that the MOL is taking right steps in protecting the interests of employees to make the process of Employment Contract much transparent so it helps the economy as a whole and also puts candidates, employees at ease.

What do you feel about this? Let me know at: http://forum.emiratesdiary.com