United Arab Emirates

The United Arab Emirates, or UAE, which comprises seven Emirates (i.e., Abu Dhabi, Dubai, Sharjah, Fujairah, Ajman, Um Al-Quwain, and Ras Al Khaimah) is an increasingly popular destination for businesses. It has been known for a relatively commercial and regulation-light place to operate, as well as for allowing expats to be paid tax-free as a major incentive. But with the New Labour Law, which came into force on 2 February 2022, the UAE has moved closer to the West, with the introduction of increased protections as part of modernising the workplace for employers and employees. With only a few months left to comply with changes under the new law and recent policy developments, we highlight the main action points and changes.

Note, the New Labour Law does not apply in the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market Free Zones.

Key Changes

• Mandatory fixed term contracts – three months to go: Strict requirements have been imposed, which means all employees must be engaged under fixed terms by 2 February 2023. Initially the law stated these must be capped at three years (terminable on notice). However, this has now been amended to provide the fixed term can be uncapped. If employers have already agreed three-year fixed terms, and now want to tie in employees for longer, they can either wait until expiry to renew or look to amend the contracts to include a longer term.
• Discrimination – new protections: Discrimination based on...

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