10th February, 2020
Opening up the Market in the United Arab Emirates – General Outline Relating To Employment Matters
This is the sixth in a series of 6 articles with regards to establishing a business in the United Arab Emirates.
General Outline Relating To Employment Matters
Employment matters within UAE are governed by federal law and are applicable to all of the emirates of the UAE and enforced by the Ministry.
Under UAE employment law, the Arabic language must be used for all employment records, contracts, files and data and is also used in relation to all instructions and circulars issued by an employer to its employees. A copy of the employment contract in a secondary language is allowed if the employee’s first language is not Arabic; however, any conflict between interpretations of the two versions of any employment contract will rest upon the interpretation of the Arabic version.
The overriding employment law within UAE applies to all staff and employees working within the UAE, whether or not they are UAE nationals or come from another country.
There are certain exemptions from the employment law; in particular a partner in a business is not considered an employee and is therefore not required to obtain an employment card. It is always advisable to take proper advice in relation to the differing categories and whether employment law applies, as there are some grey areas where, for instance, employees are paid on a commission basis.
The written Employment Law within the UAE covers “employment contracts, wages, working hours, maintenance records and files, holiday, restrictions on employment, health and safety, codes of discipline, any service benefits and other issues”.
There are fixed minimum notice periods and fixed maximum working hours under the employment law. The employment of people within the UAE needs to be considered carefully and proper advice taken. In addition, there are mandatory rules that apply in relation to termination and compensation to employees regardless of any choice of law in the individual’s employment contract. The normal position is to have a written employment contract to give some certainty to the terms of employment. However, oral employment contracts are also valid and proof of its existence may be established by the course of dealings between the parties.
When a new business is established, it must be registered with the Ministry before the employment of staff can take place.
An application will be made to the Ministry to employ local and any foreign employees in the UAE. This application must be approved by the Ministry before the employee takes up his employment or before he enters the UAE.
There are also other immigration procedures which need to be followed.
There may be other requirements demanded by the Ministry, such as a bank guarantee for security of any ‘end of service’ benefits and repatriation costs to a non-UAE employee.
If the intended employee is a UAE national, an employment contract may be entered into at any time. Employment contracts for non-UAE nationals must be drawn in the format approved by the Ministry on an application made by the employer. However, employment contracts for national employees do not need to be in writing and may be proved by any means including dealings between the parties. It is useful to note that the Ministry will not issue an employment permit for non-UAE employees unless a formal written employment contract is filed with the Ministry.
Article 1 – Legal System and General Business Vehicles
Article 2 – Free Zone Companies
Article 3 – Other ways of doing business in the UAE
Article 4 – Forming a Private Company
Article 5 – Financial Reporting and Corporate Governance
Article 6 – General Outline Relating To Employment Matters
Corporate & Commercial Partner
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