Six things employers should know about UAE labour law

Author: Kirsty Tuxford | Date: 09 Dec 2015

There is no concept of 'gross misconduct' and employers must provide a valid reason for dismissal, says employment lawyer

UAE labour law is an evolving thing, as HR professionals in the country will readily attest. But HR solution provider Dulsco and legal specialists Hadef & Partners recently attempted to make sense of the situation, at a workshop that brought together HR managers from Abu Dhabi companies. People Management got an overview of the key principles, as well as some advice on how to build a compliant and flexible workplace, in six main areas.
1 Recruitment
Resist the temptation to take potentially costly shortcuts in (or ignore altogether) the residence visa/work permit process. With limited exceptions, full-time employees will need to be sponsored by the employer (which itself must be a licensed entity) to obtain a valid residence visa or work permit, which allows them to legally live and work within the UAE.
2 Flexibility
Condition your expectations of what is possible under the framework of law in the UAE. As a 'young' country whose population is more than 80 per cent expatriate, the laws are structured to retain tight control of who is working for whom and at which location. As a result, the same degree of flexibility enjoyed in other, more established countries may not be available in the UAE.
3 Reasons for dismissal
Employers must provide a valid reason for terminating an employee's employment, and if they do not, the UAE courts are likely to decide that the dismissal was 'arbitrary'. Valid reasons typically include conduct and performance and in either case, there should be documentary evidence to support the decision and the process followed in reaching the decision. The maximum compensation for arbitrary dismissal is three months' pay (basic salary and allowances).
4. Summary dismissal
The concept of 'gross misconduct' does not exist under UAE labour law. There are exhaustive grounds on which an employee may be dismissed without notice (and with forfeiture of end of service gratuity) but they are narrowly defined and construed by the the courts.
5. End of service gratuity ('ESG')
The labour law provides that all employees with more than one year's continuous service shall be entitled to receive an ESG payment on termination od their employment. ESG is intended to provides employees with a contribution to retirement income and is typically provided instead of any pension entitlement. ESG is capped at a maximum of two years' pay, but beware; it may be reduced and/or forfeited in some circumstances.
6 Confidential information
Disclosure of confidential information is a criminal offence punishable by a minimum fine of AED 20,000 and/or up to one year imprisonment.