The UAE Labor Law, governed primarily by Federal Decree-Law No. 33 of 2021, serves as the foundational legal framework regulating employment relationships across the private sector. It applies to all employees working in the UAE, whether onshore or in most free zones, except for financial free zones such as DIFC and ADGM, which operate under their own employment regulations. The law covers essential matters such as employment contracts, working hours, wages, leave entitlements, termination procedures, and end-of-service benefits. One of the most significant updates introduced under the 2021 reforms is the shift from unlimited contracts to mandatory fixed-term contracts, allowing greater clarity and structure in employment relationships.
In terms of working conditions, the law sets a maximum working week of 48 hours, with overtime payable for additional hours worked unless the employee holds a managerial or supervisory role. Employees are entitled to paid annual leave of 30 days per year once they complete 12 months of service, as well as sick leave of up to 90 days, partially paid depending on the duration. Maternity leave has been expanded to 60 days, including 45 days at full pay and 15 at half pay, while parental leave entitles both mothers and fathers to five paid days after the birth or adoption of a child—an important recognition of shared responsibility in family care.
UAE Labor Law provides clear employee rights and employer obligations, but navigating contracts, leave, termination, and dispute procedures can be complex — consult BE LEGAL for guidance.
One of the most critical areas for employees and employers alike is termination and gratuity. The law clearly differentiates between termination with notice, summary dismissal, and resignation, each carrying different implications. Notice periods must be between 30 to 90 days, and unjustified termination may lead to compensation claims. Upon completion of at least one year of service, employees are entitled to end-of-service gratuity, calculated based on basic salary at a rate of 21 days per year for the first five years and 30 days thereafter, unless enrolled in an alternative savings scheme such as the DIFC-style gratuity investment system being piloted for wider adoption.
Finally, UAE Labor Law places growing emphasis on anti-discrimination, workplace safety, and dispute resolution. Employers are prohibited from discriminating based on gender, race, religion, or disability, and equal pay for equal work is legally enforceable. In case of disputes, employees may file a complaint with the Ministry of Human Resources and Emiratization (MOHRE), which first attempts mediation before referring unresolved cases to labor courts. The system is designed to ensure rapid and fair settlement, reflecting the UAE’s broader commitment to creating a transparent and investor-friendly labor market. Understanding these rights and obligations is essential not only for compliance but also for building sustainable and professional workplace relations.
