Employment in Freezones

Employment in UAE Freezones

In UAE each free zone has its own employment law and these free zones are not governed by the UAE Labour Law. Free zones, are subject to the rules and regulations of the free zone concerned authorities and maintain their own employment contracts. However, Labour Law will still apply and the provisions on the employment contract must be in accordance with the Law.

All free zone employees are sponsored by the respective free zone authority and not by their employers. The free zone authority sponsoring the employees, refer them directly to the immigration authorities and not to the Ministry of Labour.

This means they do not require Labour department approval. Any disputes between employees and their employers in the free zones will not first be heard at the Ministry of Labour but by the respective authority.

Employers are required to keep a bank guarantee which is required to secure the employees’ dues and any end of service benefits which may be payable on termination of their employment contracts.

Contracts in Freezone

Labour contracts in Free Zones are usually for limited to two years. In case, if the employee terminates the contract before the expiry, and if it is written in your employment contract about reimbursement of visa and other expenses, then the employer has the right to claim the reimbursement.

Such an amount shall be determined according to the employee’s position as well as salary. Usually, an employer cannot ask employee to reimburse visa cost and other expenses. It is considered contrary to the Labour Law.

If the free zone authority does not approve the transfer of sponsorship, the free zone authority shall cancel the sponsorship of the employee and the employee shall not be permitted to work for a new employer unless a valid entry permit and residence visa have been obtained. This may require exiting and re-entering the country.

Labour ban in Freezones

The Employer has the right to ask the JAFZA authority to put a work ban for a year as such a work ban is applicable for JAFZA only. In other Free Zones in general, an employer may make a recommendation to the Free Zone Authority to impose a ban on the employee, but it is at the sole discretion of the Free Zone Authority to issue the ban or not.