Applies to any entities owned "in conjunction with the federal or local government" unless the entity's constituent documents state otherwise.

Prohibits discrimination against "persons" specifically on the grounds of race, colour, sex, religion, national origin, ethnic origin or disability. It remains to be seen how this protection will be enforced in practice or what the remedy will be for individuals who are victims of discriminatory conduct.

Expressly prohibits harassment, bullying, or any verbal, physical or mental violence against employees. As with the anti-discrimination provisions, it remains to be seen how this protection will be enforced in practice or what the remedy will be for individuals who are subjected to harassment.

Although much has been made of this being a new development, the concept of equal pay in the UAE is not new – provisions requiring women to be paid the same as men undertaking work of equal value were actually introduced into the Current Law in 2020.

All employees must be employed on fixed-term employment contracts not exceeding 3 years, which may be extended for the same or shorter period. Employers will have 12 months from 2 February 2022 to transition all their employees onto new contracts. 

Employees may undertake full-time, part-time, temporary or flexible work. In practice these "models" reflect the common working modes already implemented by many UAE employers and we do not believe that the references to them in the New Law will materially impact employers or employees or the way in which they operate.

Executive regulations will be issued containing template employment contracts for each of the new flexible working models. These templates are likely to be in the relatively straightforward dual language format issued by the MHRE and we anticipate that companies will still want to issue their own employment contracts containing more sophisticated terms and conditions alongside the new template contracts being introduced.

Employers may terminate employment during probationary period by giving 14 days' written notice.

Employees who want to move to another employer in the UAE during their probationary period may terminate their employment by giving a least one month's written notice. The New Law states that, in this case, the employee's new employer should compensate the old employer for recruitment costs.

Employees who want to leave the UAE during their probationary period may terminate their employment by giving at least 14 days' written notice. The New Law states that if the employee returns to the UAE and obtains a work permit issued by the MHRE with another employee within 3 months of this departure, the employee's new employer should compensate their old employer for recruitment costs.

It is difficult to see how these new rules governing termination during probationary period are going to work in practice. 

Either party may terminate the employment relationship for "good cause" by giving written notice.

Minimum notice periods are still 30 days but notice periods are now capped at 90 days. This is likely to be an unwelcome development for employers who need to deal with the departure, replacement and recruitment of senior executives who typically have notice periods of 6-12 months.

Where the employer issues notice, the employee will be entitled to one unpaid day of leave per week during their notice period to look for new employment.

Although unlimited contracts are to be replaced by fixed-term employment contracts, rather unusually the New Law imposes minimum notice periods for the termination of existing unlimited contracts, depending on the employee's length of service: (i) 30 days if the employee’s period of service is less than 5 years; (ii) 60 days if the employee’s period of service is more than 5 years; and (iii) 90 days if the period of service is more than 10 years.

The scenarios in which an employee's employment may be terminated have been expanded to include the permanent closure of the employer, the bankruptcy of the employer and the failure of the employee to satisfy the requisite immigration requirements.

Regrettably, the list of reasons permitting immediate or summary dismissal has not been materially amended, although the New Law specifically requires a written investigation and two written warnings to be given to an employee before dismissing them for failure to perform his main duties.

It is suggested that a disciplinary process will be contained in the executive regulations.

Suspension of up to 30 days with half pay will be permitted to enable an employer to undertake a disciplinary investigation. However, an employee will be entitled to be reimbursed all pay which is withheld if they are ultimately cleared of any wrongdoing. We therefore anticipate that most employers will continue to suspend employees on full pay and benefits. 

Employers will be required to "put in place internal work regulations" in accordance with the forthcoming executive regulations. 

An employee's end of service gratuity is stated to be calculated on the basis of working days, which would be a significant change. 

In our view, this is likely to be an oversight which we hope will be addressed in the executive regulations. If the change was intentional, it will result in a significant increase in employer's liability for end of service gratuity.

There is no reduction in end of service gratuity if an employee resigns. 

Employers do not have the right to withhold an employee's end of service gratuity if they are summarily dismissed (i.e. if their employment is terminated immediately without notice). This is a significant development and reflects the approach adopted by the DIFC in 2019.

Maternity pay is increased to 60 days (45 days' full pay, 15 days' half pay). There is no qualifying service requirement.

Employees will now be entitled to maternity leave and pay in the case of stillborn babies and new-born deaths.

Employees will be entitled to additional unpaid leave of 45 days if they suffer a pregnancy-related illness. This period of leave will not be included when calculating the employee's end of service gratuity.

Employees will be entitled to 5 days' paid leave in the six months following the birth of their child. This leave will be in addition to an employee's entitlement to maternity leave and there is no qualifying service requirement. Parental leave was introduced into the Current Law in 2020.

Employees who have babies with disabilities may be entitled to an additional 30 days' leave on full pay and a further 30 days leave on no pay.

Employees will be entitled to 5 days' paid leave for the death of their spouse and 3 days' paid leave for the death of a parent, child, sibling, grandchild or grandparent. There is no qualifying service requirement.

Employees with more than 2 years' service may be entitled to 10 working days' study leave, although the New Law is silent on whether this leave will be paid or unpaid.

Employees will not be entitled to any paid sick leave during their probationary period.

Employees will be required to take their holiday in the year it falls due (although it is unclear what will happen to that holiday if they don't).

Payment in lieu of holiday pay on the termination of employment is to be calculated using basic pay only.

Deductions from wages of up to 50% of the monthly wage will be permitted.

Non-compete clauses must be no longer than 2 years, although such a lengthy restriction is going to be very difficult for an employer to justify in most cases.

Certain positions will be exempt from non-compete obligations, although this will be addressed in executive regulations.

Frustratingly, other types of restrictive covenants, such as non-poaching of employees or non-solicitation of clients and customers, are not addressed in the New Law.

Employers are expressly prohibited from retaining an employee's passport.

Overtime will be capped at 144 hours in every three-week period and will be calculated according to basic salary only.

The overtime exemption which applies under the Current Law, for employees in a supervisory or managerial position, no longer applies, and the executive regulations will determine new exemptions.

Weekly rest days no longer have to be on a Friday.

Employers should pay a deceased employee's spouse or children (as designated by the employee) all outstanding wages and end of service benefits within 10 days from the date of the employee's death. It is unclear how this requirement will interact with other UAE inheritance laws.

Employees will only be able to resign without giving notice if (i) in the case of an employer's non-compliance with their obligations, the employee notifies the MHRE 14 days before leaving and the employer fails to rectify the matter; and (ii) in the case of harassment or violence, the employee notifies the MHRE within 5 working days of being able to do so.

Employees may be paid in currencies other than AED if agreed in the employment contract, although it remains to be seen how this would work in practice for employers who are required to pay their employees via the Wages Protection System.

Employers must pay their employees all their final entitlements within 14 days of the termination of their employment.

Employers are required to retain employment records for 2 years after the termination of employment.

Fines of up to AED 1,000,000 may be imposed for breaches of the New Law, which may be multiplied in cases where numerous employees are affected.