The United Arab Emirates has issued the new Federal Decree-Law No. 33/2021 on Regulation of Labor Relations (the “new labour law”), which repeals the long-held Federal Law number 8 of 1980. The new labour law has been implemented with the twin objectives of ensuring the efficiency of the UAE’s employment sector by retaining its allure in attracting and maintaining the best, competent and future skills driven workforce. The new labour law particularly also focuses on regulating the rights and obligations of both the employer and employees in a balanced manner and thus, introduces many key regulations and changes. The new labour law applies to all establishments, employers and workers in the private sector in the UAE. However, it excludes in its application employees of federal and local government entities, members of the armed forces, police and security, as well as domestic workers. The ‘Executive Regulations’, which are now in effect from 2 February 2022 with the issuance of the Cabinet Decision (Cabinet Decision No. 1/2022 on the Implementing Regulation of Federal Decree-Law No. 33/2021 regarding the regulation of employment relationship (the “Executive regulations”).

We will discuss in this article some of the key changes introduced by the new labour law, including the types of leaves now recognized under the labour rules.

Different Categories of Leaves:

The executive regulations have introduced the following four new categories of leaves, recognizing paternity leave, study leave, bereavement leave etc.

The different categories of recognized leaves include:

• Study leave: wherein an employee may be allowed a study leave to sit for exams, provided that he has obtained an admission from one of the institutes or colleges accredited in the UAE.
• Sabbatical Leave: for UAE nationals in order to enable them to perform the national and reserve service for the UAE
• Bereavement leave: bereavement leave starting from the day of death along with the submission of proof of death upon return to work. 
• Parental Leave: Where a male employee can obtain parental leave provided that they submit proof of birth for his child. 
• Annual Leave: Annual leaves have been part of the labour law, however, new rules effecting annual leave have been introduced as part of the new changes and the same will be discussed below in detail
• Sick leave: Sick leaves have been part of the labour law, and the same will be discussed below in more detail.

All about ‘Annual Leave’:

Article 29 of the executive regulations lists out the rules affecting annual leave, and the same include:

• Annual leave term: Each employee is entitled to an annual leave with full pay of not less than Thirty days (30) for each year of his service. For an employee with an employment period that is between six months to one year the annual leaves are calculated as two days per month.
• Annual leave during probation: Concerning availing annual leave during probation period, the executive regulations states that, the employer may agree to grant employee leave from the balance of his annual leave during the probation period, while the employee retains the right to be compensated for the remainder of his annual leave balance, in case he did not pass the probation period. This essentially leaves it to the discretion of the employer to allow annual leave to a probationary employee.
• Carryover of annual leave: Concerning carry forward of unused annual leave balance, the new rules state that, an employee may with the approval of the employer, carry over the balance of his annual leave to the following year. Whilst, also stating that, an employer shall not prevent an employee from availing an annual leave for more than two years unless it is the choice of the employee to carry over the leave or to obtain a cash payment for such unused annual leave.
• Public holidays falling within Annual Leave: – In calculating the duration of the annual leave, the holidays established by law or by agreement shall be included if they fall within the annual leave enjoyed by the Worker, and shall be considered part thereof. Unless the Employment Contract or the regulations in force in the Establishment stipulate what is more beneficial to the Worker.
• Annual Leave encashment: The employee is entitled to receive the cash equivalent for any unused annual leave if the employee is leaving the employment before utilizing such balance. In such instances, the annual leave encashment is calculated based on the basic salary of the employee. However, when an employee is utilizing his annual leave while continuing his employment services then the annual leave payment is made on full pay of the employee.

By effecting the new labour law and its executive regulations, the UAE has modernized the rules governing employment relations in the country. The new changes seek to introduce both flexibilities as well sustainability in the UAE’s employment sector by addressing all current requirements. The country aims to establish a vibrant employment environment that can attract the world’s best talents.