UAE Labour Law: A 2025 Guide for Employees and Employers

The **UAE Labour Law** (Federal Decree-Law No. 33 of 2021) is the primary legislation that governs the relationship between employers and employees in the UAE`s private sector. It is a comprehensive law that sets out the rights and obligations of both parties, covering everything from employment contracts and working hours to annual leave and end-of-service benefits. The law is enforced by the **Ministry of Human Resources and Emiratisation (MOHRE)**. [1]

For both employers and employees, a clear understanding of the UAE Labour Law is not just important; it is essential for maintaining a fair, compliant, and productive workplace. The law has undergone significant updates in recent years to enhance flexibility, attract talent, and align with international best practices.

This guide provides a clear and accessible overview of the key provisions of the UAE Labour Law for 2025. We cover the most important topics that affect the day-to-day reality of employment in the UAE. T4me (t4me.com) offers expert HR and PRO services to help companies comply with the Labour Law and manage their employee relations effectively.

Key Provisions of the UAE Labour Law

1. Employment Contracts

Limited-Term Contracts: As of 2022, all employment contracts in the private sector must be limited-term contracts for a period of up to three years. The concept of unlimited-term contracts has been abolished. Contracts can be renewed for a similar or shorter period upon mutual agreement.
Probation Period: The probation period for a new employee cannot exceed six months. An employer can terminate an employee during probation with 14 days`s notice. An employee who wishes to resign during probation must also provide notice.

2. Working Hours and Overtime

Maximum Working Hours: The maximum normal working hours are 8 hours per day or 48 hours per week.
Overtime: If an employee works beyond the normal hours, they are entitled to overtime pay, which is calculated as their normal hourly wage plus a premium of at least 25%. If the overtime is between 10 pm and 4 am, the premium is 50%.
Fridays: Friday is the official weekly rest day. If an employee is required to work on a Friday, they are entitled to a substitute rest day or overtime pay at a 50% premium.

3. Leave Entitlements

Annual Leave: Employees are entitled to 30 calendar days of paid annual leave after completing one year of service.
Sick Leave: After the probation period, an employee is entitled to 90 days of sick leave per year, which is paid as follows:

First 15 days: Full pay
- Next 30 days: Half pay
- Next 45 days: Unpaid
Maternity Leave: Female employees are entitled to 60 days of maternity leave:
- First 45 days: Full pay
- Next 15 days: Half pay
Other Leaves: The law also provides for other types of leave, including parental leave, bereavement leave, and study leave.

4. End-of-Service Gratuity

When an expatriate employee`s service ends, they are entitled to an end-of-service gratuity, which is calculated based on their basic salary:

21 days‚ as basic salary for each of the first five years of service.
30 days‚ as basic salary for each subsequent year of service.
The total gratuity amount cannot exceed two years a full salary.

How T4me (t4me.com) Can Help You Comply with the Labour Law

Staying compliant with the UAE Labour Law and its regular updates is a major challenge for many businesses. T4me`s HR consultancy and PRO services are designed to ensure your company is always in full compliance.

Our services include:

HR Policy and Contract Drafting: We help you to draft employment contracts and HR policies that are fully compliant with the Labour Law.
MOHRE Services: We manage all your transactions with MOHRE, including work permit applications and contract submissions.
WPS and Payroll Support: We assist you in setting up and managing your payroll in compliance with the Wages Protection System.
Legal Advisory: We provide expert advice on all aspects of the Labour Law, helping you to manage employee relations and disputes.

Frequently Asked Questions (FAQ)

1. Does the Labour Law apply to free zone companies?

No, the federal UAE Labour Law applies to companies on the mainland. Free zones have their own employment regulations, which are often based on the federal law but may have some differences.

2. Can my employer keep my passport?

No, it is illegal for an employer to withhold an employee`s passport.

3. What is arbitrary dismissal?

Arbitrary dismissal is when an employer terminates an employee for a reason that is not related to their work performance or conduct. If a court finds that an employee has been arbitrarily dismissed, they may be awarded compensation.

4. What is the notice period for terminating a contract?

The notice period must be specified in the contract and must be at least 30 days, but not more than 90 days.

5. Are there different types of work models available?

Yes, the new law introduces flexible work models, including part-time work, temporary work, and flexible work arrangements.

Conclusion: A Framework for a Fair Workplace

The UAE Labour Law provides a robust legal framework that balances the rights and obligations of employers and employees, creating a stable and attractive environment for both. Its recent updates reflect the UAE`s commitment to becoming a more flexible, modern, and competitive global talent hub.

For employers, compliance with the law is not just a legal duty but a cornerstone of good business practice. For employees, understanding their rights is key to a secure and fair employment experience. With the expert guidance of T4me, both companies and their employees can navigate the UAE`s labor landscape with confidence and clarity.

Contact T4me (t4me.com) today for expert advice and support on all matters related to the UAE Labour Law. Let us help you build a compliant and productive workplace.

References

[1] U.AE. “The UAE Labour Law.” u.ae, 2023, https://u.ae/en/information-and-services/jobs/the-uae-labour-law.