The UAE draws foreign investment from a diverse group of investors from around the world. Making sure you understand your major obligations as an employer and your employees’ rights under UAE labour law is an important component of establishing a business in the UAE. For that, it is important to understand some of the UAE Labour Law applies to all sorts of businesses. So it is important to become familiar with them before expanding your business in the UAE.
What kinds of safeguards do employees have?
Working hours, vacation and public holidays, medical leave (including maternity and paternity leave), safety requirements, termination of employment, and end-of-service gratuity payments are among the sections of the labour law that employees cannot contract out of. All of these benefits aim at augmenting their work experience during their working tenure. If the employer falls short of providing them, they can always seek help under article 121 UAE Labour Law and get relevant assistance from a trustworthy and reputable organization.
Obtaining a Business License
Following the receipt of your business’s trade license, you must open a labour and immigration account by:
- Obtaining an establishment immigration card (establishment card), as well as
- registering your business with the General Directorate of Residency and Foreigners Affairs. It is a division of the UAE Ministry of Interior responsible for controlling travel into and out of the country.
Your company can use the establishment card to hire foreign workers and apply for a range of visas. This includes foreign investors, partners, and employment visas. The card is valid for one year and renews annually before its expiration date to avoid penalties.
All this requires dealings, negotiations and filing a ton of paperwork. Working with an experienced UAE-based business law firm like James Berry & Associates can help you get all your documentation in order. This will ensure that you do not get into any future problems in terms of your employees or taxation.
Sponsorship and Hiring in the United Arab Emirates
For each new employee you hire, make the following adjustments:
- The Ministry of Human Resources and Emiratisation (MOHRE) requires onshore enterprises to get a labour card, and
- Employers who work in a free zone must get an identity card from the appropriate free zone authorities.
To live and work in the UAE, all non-UAE nationals must obtain a work permit and a resident visa. These licenses allow the employees to meet the UAE’s skill/educational requirements and the company sponsors it (either their employer or the free zone itself). Also, UAE companies sponsor their employers by the free zone itself.
The number of resident visas your company can issue is proportional to the size of its firm. The usual standard for DED license enterprises is 100 square feet of office/warehouse space per visa. However, it is open for adjustments according to the requirements of the economic department according and their license’s activity category. Furthermore. the applicable free zone authorities advise the eligibility of the number of visas open for issuance within the free zones.
Different kinds of employment contracts
Your employees must sign a standard template offer letter outlining the basic terms of employment (in English and Arabic) as well as a longer form contract outlining more specific commercial terms. Both employment agreements are considered upon the termination of employment or in the event of a dispute, and the most helpful provisions are applied. Employment contracts can be for a fix (limited) or indefinite (unlimited) period, according to labour law.
A UAE employment contract must include the following basic information, according to Article 36 of the labor law:
- the contract’s duration (limited or unlimited)
- the start date of the project
- the nature of the work
- the site of workplace
- monetary compensation
Some economic free zones encourage the firm to enter into employment contracts based on a predetermined template. Moreover, the documentation must include all details of labour law provisions in employment contracts.
Termination of an Employee’s Employment Contract
An open-end contract may only be terminated without cause with notice and for a legitimate work reason. It may be considered arbitrary if a dismissal is not connected to an employee’s work, for cause, or any other justifiable reason as defined by Article 120 of the labour law. A competent court may then rule on the employee’s claim of arbitrary dismissal and award compensation of up to three months’ pay.
The Takeaway
Expansion is important for any business. It encourages growth and development for any business. Also, one can diversify their products or enter new markets, based on what suits their business needs. Depending on your business nature, you can hire anyone ranging from an employment lawyer to real estate lawyer Dubai, and make the most of the professional and expert advice they sent your way.
