New UAE Labour Law Rules by MOL (2016)

New UAE Labour Law Rules (Ministerial Decrees)

UAE Ministry of Labour has issued a new set of rules through 3 new Decrees: Ministerial Decree 764, Ministerial Decree 765 and Ministerial Decree 766. I feel these Decrees are a big development in the Labour Law which clarify important issues of the Labour Law. These Decrees will become effective January 1, 2016.

The three Ministerial Decrees are as follows:

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 

Below is the pure text of the aforementioned Ministerial Decrees. In short time, I will publish my interpretations of these Decrees. In my opinion, these decrees are very important and will significantly address key concepts of the UAE Labour Law.

Ministerial Decree 764: Standard Work Contracts

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

Ministerial Decree 765: Termination of Limited Contract and Unlimited Contract

Minister of Labour’s decree (765) of 2015 on Rules and Conditions for the Termination of Employment Relations

The Minister of Labour:

Upon consulting Federal Law (1) of 1972 on the mandates of ministries and the powers granted to ministers; and of Federal Law (8) of 1980 and its amendments governing labour relations.

Decrees:
Article (1)

An employment relation between employer and worker may be terminated as follows:

I. In the case of fixed-term contracts (approved by the Ministry for a term of no more than two years), an employment relation is terminated if any of the following instances occurs:

1. The term of the contract expires and the contract is not renewed.

2. Employer and worker mutually consent to terminate the contract during the course of its term.

3. Either party (employer or worker) acts unilaterally to terminate the contract and complies with the legal steps that are described in clause (4) of this article. The terminating party bears any legal consequences of early termination.

4. Either party (employer or worker) acts unilaterally to terminate a renewed term contract, whether renewal has occurred before or after this decree enters into effect, provided the terminating party complies with the following legal steps:

a. Notify the other party in writing of its intent to terminate the contract in accordance with the notice period to be agreed to by the two parties, not to be less than one month and not to exceed three months. If renewal occurred before this decree enters into effect and the parties had not agreed to a notice period, this notice period shall be three months.

b. Continue to honour his/her contractual obligations for the duration of the notice period.

c. Indemnify the other party to the level that was agreed to by both parties, not to exceed the equivalent of three months of gross wages. If renewal occurred before this decree enters into effect and the parties had not agreed to the amount of indemnification, this indemnification shall be the equivalent of three months of gross wages.

5. Either party (employer or worker) acts unilaterally to terminate the contract without complying with the legal steps that are described in clause (4) of this article, and for no reason of non-compliance by the other party; in this case the terminating party bears any legal consequences of early termination.

6. The Employer acts to terminate the contract of a worker who commits any of the violations that are described in Article (120) of the Federal Labour Law.

II. In the case of unlimited (not term-bound) contracts, an employment relation is terminated if any of the following instances occurs:

1. The two parties consent to termination.

2. One party acts, at any time, to terminate the contract subject to notifying the other party and continuing to honor contractual obligations for the duration of the notice period, which cannot be less than one month and cannot exceed three months.

3. One party (employer or worker) acts unilaterally to terminate the contract, without complying with the legal conditions described in (2) above and without reason of non-compliance by the other party; in this case the terminating party bears any legal consequences of early termination.

4. The Employer acts to terminate the contract of a worker who commits any of the violations that are described in Article (120) of the Federal Labour Law.

In all instances of termination described in this Artile (1), either Employer or Worker may refer to the judicial system to seek indemnification or recover other rights under the Federal Labour Law and its implementing decrees.

Article (2)

An employment relation is considered to have de facto ended if any of the following instances occurs:

1. It is duly established that the employer has failed to meet contractual or legal obligations to the worker (as in, but not limited to, the non-payment of wages for a period exceeding 60 days)

2. The worker has filed a court complaint against an employer who failed to secure employment of the worker as a result of the shutting down of the employer’s business, in which case a report by Labour Inspection attesting to the fact that the business has been inactive for a period exceeding two months must be obtained and the worker must have reported to the Ministry during this period.

3. A labour complaint is referred to the court by the Ministry and a final ruling is obtained in favour of the worker stating that the worker is entitled to no less than two-month wages or to indemnification for arbitrary firing or early termination of a fixed-term contract, or any other benefits denied to him by the employer for no lawful reason or including the end-of-service benefit.

Article (3)

An employment relation is deemed to have ended without due process when:

1. The employer terminates the employment relation without complying with legally mandated procedures;

2. The worker employer terminates the employment relation without complying with legally mandated procedures;

In which cases the wronged party may initiate legal action to seek indemnification or the recovery of other rights as stipulated by the aforementioned Law governing labour relations.

Article (4)

Any and all provisions of previous ministerial decrees that are contrary to, or inconsistent with the provisions of this present decree are hereby rendered null and void.

Article (5)

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

Ministerial Decree 766: Granting of New Work Permits 

Ministerial Decree (766) of 2015 on Rules and Conditions for granting a permit to a worker for employment by a new employer.

The Minister of Labour:

Upon review of Federal Law (1) of 1972 on the mandates of ministries and the powers granted to ministers and of Federal Law (8) of 1980 and its amendments on the regulation of labour relations;

And of the Council of Ministers’ Decree (25) of 2010 on internal work permits that are granted by the Ministry of Labour to workers who are active in the labour market;

And of Decree (826) of 2005 issued by the minister of Labour on rules implementing the transfer of sponsorship;

And of Ministerial decree (707) of 2006 on terms and procedures for granting non-nationals permits to engage in employment in the UAE;

And of ministerial Decree (724) of 2006 on administrative termination of sponsorships;

And of Ministerial Decree (1186) of 2010 on the rules and conditions for granting permission to a worker whose employment relation has ended to work for a new employer;
And of Ministerial Decree (422) of 2015 on the rules and conditions governing the termination of an employment relation.

Decrees:
Article (1)

A new work permit may be granted to a worker upon the termination of the said worker’s employment relation in the following instances:

I. Term contracts

1. The term of the contract has expired and not been renewed.

2. The two parties (worker and employer) mutually consent to terminating the contract during the course of its term, provided the worker has completed a period of no less than six months with the employer; the latter provision is waived for workers that qualify for skill levels 1, 2 and 3, as per the ministry’s classification.

3. The employer initiates the termination of the employment relation, without reason of non-compliance on the part of the worker, provided the worker has completed a period of no less than six months with the employer; the latter provision is waived for workers that qualify for skill levels 1, 2 and 3, as per the ministry’s classification.

4. Either party acts unilaterally to terminate the employment relation following its renewal (irrespective of the period the worker has been in the employment of the employer and irrespective of the date of renewal) provided that:

a. The terminating party notifies the other party in writing of his/her intent to terminate the contract in accordance with the notice period that was agreed to by the two parties, not to be less than one month and not to exceed three months. If renewal of the contract occurs prior to this decree entering into effect, and the two parties had not agreed to a notice period, then the notice period shall be three months.

b. The terminating party continues to honor the contractual obligations for the duration of the notice period.

c. The terminating party indemnifies the other party in the amount that was agreed to by the two parties, not to exceed the equivalent of three months of gross wages; if renewal of the contract occurs prior to this decree entering into effect, and the two parties had not agreed to the amount of indemnification, indemnification is set at the equivalent of three months of gross wages.

II. Non-term contracts

1. The two parties (worker and employer) mutually consent to terminating the contract provided the worker has completed a period of no less than six months with the employer; the latter provision is waived for workers that qualify for skill levels 1, 2 and 3, as per the ministry’s classification.

2. One of the parties acts to terminate the contract and notifies the other party and continues to honor his/her obligations under the contract for the duration of the notice period which shall be no less than one month and no more than three months, provided the worker has completed a period of no less than six months with the employer; the latter provision is waived for workers that qualify for skill levels 1, 2 and 3, as per the ministry’s classification.

3. The employer acts to terminate the contract without reason of non-compliance by the worker, provided the worker has completed a period of no less than six months with the employer; the latter provision is waived for workers that qualify for skill levels 1, 2 and 3, as per the ministry’s classification.

III. For all contracts: term and non-term

The instances described in I- and II- of this article notwithstanding, a worker may be granted a new work permit:

1. It is determined that the employer has failed to meet his legal or contractual obligations, including but not limited to when the employer fails to pay the worker’s wages for more than 60 days.

2. When a complaint is filed by the worker against a business entity that has not provided for the worker to perform work due to its shutting down, provided an Inspection report is produced that attests that the business entity has been inactive for more than two months and the worker has reported to the Ministry during this period.

3. When a labour complaint is referred by the Ministry to the labour court, provided a final ruling in favuor of the worker is issued that attests that the worker is owed wages for no less than two months of work or indemnity for arbitrary or early termination, or any other rights that the employer has abstained from granting, or dues of end-of-service.

In all of cases described in this article, the worker must have met all conditions and requirements of the provisions of the law before being granted a new permit.

Article (2)

No new work permit shall be granted except in the cases described in Article (1)

Article (3)

All those empowered to issue new work permits to workers in educational institutions during the school year shall obtain the approval of the relevant government agencies prior to issuing such permits in accordance with the provisions of article (1) of this decree.

Article (4)

A work permit that is granted in application of this decree shall be made null and void if it is established by the ministry that information the approval of the permit was based on was falsified.

Article (5)

Ministerial Decree (1186) of 2010 on the rules and conditions for granting permission to a worker whose employment relation has ended to work for a new employer is hereby nullified, as are any texts or provisions that are contrary to provisions of this present Decree.

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