Navigating employment law in the UAE can be complex due to the coexistence of multiple legal systems. This guide provides a simplified, yet comprehensive overview tailored to both employers and employees. Employment law governs the relationship between employers and employees, sets minimum working conditions, and ensures fair treatment.

In the United Arab Emirates (UAE), employment regulations differ across jurisdictions. The primary frameworks are: UAE Federal Law: Governs employment relationships across mainland UAE. Dubai International Financial Centre (DIFC): Operates under UK common law principles. Abu Dhabi Global Market (ADGM): Follows a similar common law framework. While UAE Federal Law is rooted in civil law, DIFC and ADGM adopt a UK common law framework, offering greater contractual flexibility. This guide compares these systems to clarify the obligations and rights of both employers and employees. 

UAE Federal Law: Key Features 

The UAE Federal Law, primarily governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relationships (as amended), applies to most private-sector employment relationships in mainland Dubai, Abu Dhabi, and other emirates (excluding DIFC and ADGM). 

MOHRE Offer Letter 

The Ministry of Human Resources and Emiratisation (MOHRE) mandates a standardized offer letter before issuing a work permit or labour contract. This document must outline Job title, salary, and working hours. Both parties must sign the offer letter, and it must align with the contract submitted to MOHRE. Once signed, it becomes legally binding. 

Withdrawing from a Signed Offer Letter 

Withdrawing from a signed offer letter has varying consequences:

• If submitted to MOHRE, the employer may have incurred fees, applied for a work permit or visa, and reserved a labour quota. MOHRE may impose a six-month labour ban, restricting employees from working in MOHRE-governed areas. Employers could also seek compensation or blacklist the employee, affecting future job prospects. 

• If not yet submitted: The employee can withdraw with minimal impact but should notify the employer formally to maintain professionalism. 

Understanding Travel and Labour Bans 

A travel ban restricts a person from exiting or entering the UAE and can arise from:

• Financial Liabilities: Unpaid debts or loans. 

• Criminal Proceedings: Ongoing investigations or convictions. 

• Civil Litigations: Legal disputes involving claims. 

• Immigration Violations: Overstaying visas or breaching permit conditions. 

• Labour Disputes: Unresolved employment issues. 

A MOHRE labour ban, however, only prohibits work in MOHRE-governed areas, allowing employment in free zones like DIFC or ADGM. A travel ban, by contrast, prevents meeting MOHRE work permit requirements, leading to offer letter rejection and inability to work in the UAE. 

Employment Contract Requirements 

Employment contracts under Federal Law must include the employer’s name and address, the employee’s name, nationality, date of birth, and proof of identity; job title, qualifications, and workplace; contract term; commencement date; and probationary period (if applicable). 

Additional terms cover:

• Working hours, rest days, and annual leave entitlements 

• Wage, including benefits and allowances 

• Notice period and termination procedures 

Contracts must be in Arabic (with an English version if needed), duplicated for both parties, and registered with MOHRE. 

Wage Protection System (WPS) 

The WPS ensures timely wage payments for private-sector workers via an electronic transfer system. Employers in mainland UAE and Jebel Ali Free Zone (JAFZA) must enroll, enhancing transparency and record-keeping. 

DIFC and ADGM: Common Law Frameworks 

While UAE Federal Law provides a structured framework for mainland employment, the DIFC and ADGM offer distinct systems based on UK common law principles, catering to international businesses. These jurisdictions allow greater contractual freedom, skipping external registration requirements. Contracts, written in English, can include customized terms like bonus structures or remote work clauses, aligning with their global focus. 

Comparative Analysis Across Jurisdictions 

The three systems share some features but diverge in ways that shape employment relationships. Below is a detailed comparison. 

Probationary Period 

All jurisdictions permit a probationary period of up to six months, but notice requirements differ:

This flexibility in DIFC and ADGM aids employers in swift onboarding decisions. 

Working Hours 

Maximum working hours vary slightly:

• UAE Federal Law: Eight hours per day (48 hours per week), reduced by two hours daily during Ramadan. 

• DIFC and ADGM: 40–48 hours per week, with no mandatory Ramadan reduction (though many employers adjust voluntarily). 

These differences reflect Federal Law’s cultural alignment and DIFC/ADGM’s business-oriented approach. 

Leave Entitlements 

Leave policies vary across jurisdictions:

Federal Law offers more annual leave, while DIFC and ADGM provide slightly longer maternity leave. 

Termination and Notice Periods 

Notice periods depend on service length:

ADGM’s rule for over five years aligns with DIFC but may vary by contract terms. 

End of Service Benefits and Alternative Schemes 

End-of-service benefits differ significantly:

• UAE Federal Law: Employees receive gratuity based on tenure and last basic salary. An alternative scheme (Ministerial Resolution No. 668 of 2023) allows contributions to an investment fund:

• 5.83% of monthly salary (< 5 years of service). 

• 8.33% of monthly salary (> 5 years of service). 

• DIFC: Uses the Dubai Employee Workplace Savings (DEWS) plan, where employer contributions fund a savings account with investment potential. 

• ADGM: Employs a similar pension-style savings scheme. 

The Federal Law alternative offers portability and growth, aligning with global trends. 

Conclusion 

This multi-jurisdictional structure means that employment rights, entitlements, and obligations differ significantly depending on the location of the employment relationship. While the Federal law offers a broad structure and legal framework, the DIFC and ADGM offer greater contractual freedom and flexibility. Understanding the differences is crucial for both the employer and employee, as the specific obligations for each are not the same across the 3 legal systems. As the UAE continues to evolve as a global business hub, staying informed about the legalities surrounding the employment relationship is not just advisable but essential.