As a prominent business-friendly economy, UAE’s labour laws, ministerial decrees and business guidelines are largely directed at helping businesses function more effectively and for employees to have a more productive and fulfilling work experience.
While laws regarding the commercial legal structure constitute a major chunk of these laws, there are also a series of guidelines focusing on the employer-employee association that need to be taken into account when it comes to setting up a business in the UAE.
Even though the Labour Law and other organizational measures can be a complex in their form, with numerous sections, amendments and regular updates, considering and implementing these important factors before appointing an employee can contribute manifold to the smooth functioning of a business in Dubai. It is important to note that these laws might differ when it comes to different economic zones, as most of them have their own set of employment rules. In addition to these laws, the UAE immigration orders, decrees and visa regulations also need to be taken into consideration.
Below we take a look at a few core principles that every business owner and entrepreneur needs to be aware of before setting up offices in the UAE:
The UAE Labour Law
The UAE Labour Law defines the major characteristics involved in an employer-employee association in the country. As a business owner in the UAE, it is imperative that you follow the Labour Law while appointing a new employee.
The UAE Labour Law mainly offers guidelines for employment contracts, labour examinations, document maintenance, direction on wages, the protection, safety, medical and social welfare provided by the company to the employee, the restrictions on employment terms, regulations on working hours, procedures involved in application for leave, end of employment contracts, codes of conduct and discipline, and reimbursement on occupational issues, employment-related accidents and deaths etc.
End of Sponsorship
In the UAE, it is common for employers to sponsor employees with visa, tickets and in some cases even food and accommodation. While providing these benefits, the company must remain aware that it is responsible for the employee’s actions, including liabilities and misconducts. At the end of his service, it is mandatory that the ticket for the employee to exit the country is provided by the employer or the sponsorship shifted to someone else.
An employer appointing a person without a valid employment visa is liable to be punished with huge monetary penalties, a jail sentence, or even deportation. This is why it is critical that proper documentation should never be skipped over when recruiting a person to a position. Some individuals, like those on a spouse visa, students or part-time employees can be exempted from this rule.
The employment contract works as a document that clarifies the relationship between the employer and the employee and defines the rights and duties for both of them. While the primary contract is issued by the government, regardless of the economic zone, companies sometimes append employment contracts with added guidelines, limitations and reimbursements. In the case of any dispute, this agreement will serve as a governing instrument.
Some of the most common issues faced in the UAE when it comes to the employment relationships are related to termination and compensation. Based on their nature, terminations are classified majorly under two categories – premature and/or due to a cause. No matter what the reason, companies must take care to remember that due termination notice and process is followed, and that appropriate remuneration is provided depending on the period and nature of employment and the nature of the termination.
To gain more information and understanding about the labour laws and guidelines for businesses operating in the UAE, make sure you get in touch with an expert team of business consultants. As a registered company formation agency for the Dubai Airport Free zone Authority and Dubai Silicon Oasis, we would like to help you set up your business in the city.