Which companies does the New Labour Law apply to? 

The New Labour Law, which will come into force on 2 February 2022, is applicable to employers and employees in the UAE's private sector. This includes companies incorporated in the UAE mainland and regulated by the Ministry of Human Resources and Emiratization (“MoHRE”) as well as companies in the free zones (except for those based in the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC)). The New Labour Law also applies to companies wholly or partly owned by federal or local government unless their establishing laws state otherwise. Companies will need to understand the impact and adapt their operations in compliance with the changes arising from the New Labour Law.

What has changed with the New Labour Law?

The New Labour Law has introduced welcome changes. We have set out in the Annex a high-level summary comparison of the key provisions of the New Labour Law vis-à-vis the old Labour Law. Note that the implementing regulations are expected to be issued in 2022 which will supplement and expand on the key provisions. 

How does the weekend change impact the private sector? 

At the moment, the new working week and weekend apply to the public sector only. The private sector is not required to align their working week with the public sector (although it has been encouraged by the UAE authorities). 

Private sector companies have the flexibility to determine their working days/hours (in compliance with the minimum requirements of the New Labour Law). Private companies can choose to operate on the days that best fit the particular needs of their businesses and statements have been released to this effect by the UAE authorities. Under the New Labour Law, employees are entitled to at least one day off per week and this off day does not necessarily need to be on a Friday.

While we would expect most companies to move to a Saturday/Sunday weekend to align with schools and government operations (and this is what we are seeing in the market), it remains to be seen whether this will be adopted universally or whether the move to a 4-and-a-half day working week will be embraced by private sector companies.

Our UAE Employment team is well versed with the New Labour Law and would be delighted to support you in updating your employment contracts and policies in preparation for the upcoming changes. We shall also be rolling out training sessions and workshops in 2022.

We are also currently working with a number of companies who are exploring the impact on their businesses of the recent announcement of the weekend change and creating practical action plans to facilitate a smooth transition to a Monday-Friday working week. Please reach out to our Employment team if you require assistance. 

To speak to us in relation to the New Labour Law, the weekend change, or any labour and employment related matters, please feel free to contact our UAE Employment team.

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Click here to access the annex.

Click here to download the Full Alert.

This client alert was issued by Habib Al Mulla & Partners, a member firm of Baker McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner or equivalent in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.