UAE Employment Law — FDL 33/2021, MOHRE, EOSB, non-competes

Federal Decree-Law 33 of 2021, effective 2 February 2022, is the new federal Labour Law — replacing FL 8/1980 after 42 years. Headline reforms: only limited-term contracts (max 3 years renewable; pre-2022 unlimited-term contracts had to be migrated to limited-term within transition period); nine work models (full-time, part-time, temporary, flexible, remote, condensed-hours, job-sharing); 6-month probation; modernised termination grounds (Article 44); statutory non-compete (Article 10); anti-discrimination provisions; maternity leave 60 days (45 paid + 15 half-paid). Amended by FDL 9/2024 on penalties and compliance.

FDL 33/2021 Article 8: only limited-term contracts permitted, max 3 years (renewable). Cabinet Decision 1/2022 Article 5 lists the nine work models: (1) full-time; (2) part-time; (3) temporary; (4) flexible (variable hours); (5) remote work; (6) job-sharing; (7) condensed hours; (8) freelance / shared employment; (9) any other model approved by MOHRE. Probation up to 6 months (single allowed). Contract must be in writing, in Arabic + at least one other language understood by the worker.

FDL 33/2021 Article 9: probation up to 6 months, single (cannot be extended). Termination during probation: employer gives 14 days' written notice; worker gives 14 days' notice (30 days if leaving UAE altogether — unique to FDL 33). If a worker resigns during probation to take up another UAE-based role, the new employer must compensate the original employer for recruitment / visa costs (Article 9(4)). On successful completion, probation period counts toward gratuity.

FDL 33/2021 Article 43: notice period must be agreed in the contract — minimum 30 days, maximum 90 days. Either party may pay notice in lieu (Article 43(3)). Notice must be in writing. Worker on notice retains all entitlements (salary, leave) until expiry. Termination without notice (gross misconduct) under Article 44 is the only no-notice ground.

FDL 33/2021 Article 42 (lawful grounds with notice): mutual agreement; expiry of contract; either party's notice; force majeure; insolvency; closure of establishment; non-renewal of work permit. Article 44 (immediate termination — gross misconduct, no notice): false-identity offence, gross negligence causing material loss, breach of confidentiality, conviction for crime affecting honour, intoxication at work, assault, repeated unauthorised absence, breach of safety obligations causing harm. Process must be documented.

FDL 33/2021 Article 51: foreign workers earn gratuity on basic salary only (excluding allowances). Rate: 21 days' basic salary per year for the first 5 years; 30 days per year thereafter. Cap: 2 years' basic salary. Earned only after 1 year continuous service. Gratuity is paid on termination (any reason except summary dismissal under Article 44 for which gratuity may be forfeited). Local UAE nationals receive GPSSA pension instead.

Federal regime still uses the gratuity model under FDL 33/2021 Article 51. Cabinet Decision 96/2023 introduced a federal voluntary alternative end-of-service savings scheme (effective 2023) — employers can opt in to substitute gratuity with monthly contributions to a regulated investment fund. Adoption is gradual; gratuity remains the default for most onshore employers.

FDL 33/2021 Article 47: if a worker is dismissed for reasons unrelated to the work, or in retaliation for a legitimate complaint, or without due process, the dismissal is "arbitrary". Court may award compensation up to 3 months' total salary (in addition to notice and gratuity) — the "arbitrary dismissal indemnity". Court considers length of service, circumstances, and damage suffered. Lower in practice than DIFC/ADGM compensation but more accessible.

FDL 33/2021 Article 10 + Cabinet Decision 1/2022 Article 12: yes, but limited. Conditions: (i) employee was exposed to confidential information or clients; (ii) restriction is reasonable in time (max 2 years), geographic scope, and business activity; (iii) restriction goes no further than necessary. Employer may claim damages or specific performance via Labour Court. Practical: courts read down or strike unenforceable clauses; well-drafted narrow clauses (e.g. 6-12 months, named region, specified competitors) are routinely enforced.

FDL 33/2021 Articles 28-30. Annual leave: 30 calendar days after 1 year service; pro rata for first year (2 days per month). Sick leave: first 15 days fully paid; days 16-45 half paid; days 46-90 unpaid. Sick leave certificate required from approved medical authority. Public holidays: 12-14 days per year (varies by Cabinet Decision; includes UAE National Day, Eid Al Fitr 4 days, Eid Al Adha 4 days, Islamic New Year, Prophet's Birthday, etc.).

FDL 33/2021 Articles 30-31. Maternity: 60 days (45 fully paid + 15 half paid). Plus optional 45 days unpaid. Worker may also receive paid breastfeeding hour for 6 months post return. Paternity: 5 working days (paid), to be taken within 6 months of birth. Parental leave: 5 days for child's first year applicable to both parents. Premature-birth leave: extended where medically required.

WPS is the federal electronic salary-payment monitoring system run by MOHRE through CBUAE-licensed banks and exchange houses. All onshore private-sector employers must pay salaries through WPS — the salary is transferred from employer to a CBUAE-licensed agent bank, which then credits the employee's account. Late payment triggers escalating penalties: warning → AED 1,000 fine per worker → trade-licence suspension → criminal referral. Cabinet Decision 28/2022 introduced revised WPS compliance bands and penalties.

FDL 33/2021 Article 17: standard 8 hours/day, 48 hours/week. During Ramadan: reduced by 2 hours/day for Muslim workers (industry practice often applies broadly). Overtime: cap of 2 hours/day; pay at 125% of basic hourly rate; 150% for night-shift overtime (10pm-4am) or rest-day overtime; 50% premium for public-holiday work. Senior management is typically exempt from working-hours rules.

Stage 1: MOHRE conciliation — file via MOHRE app or Tasheel; conciliator typically resolves within 14 days. Stage 2: if conciliation fails, MOHRE issues a referral letter to the Labour Court (CFI Labour Circuit). Stage 3: Labour Court hearing — typically 60-120 days. Court fees waived for workers on claims up to AED 100,000. Appeal to Court of Appeal then Court of Cassation under Civil Procedure Law 42/2022. Worker can bring claim independently; representation by counsel optional.

FDL 33/2021 Article 4: discrimination on the basis of race, colour, gender, religion, national origin, social origin, or disability is prohibited. FDL 14/2022 (Anti-Discrimination Law) reinforces. Equal pay for equal work rule (Article 4(2)) — discrimination in remuneration based on gender expressly prohibited. Sexual harassment, bullying, intimidation prohibited (Article 14). Penalties: administrative fines under FDL 9/2024; civil damages through Labour Court.

Foreign workers need: (i) MOHRE work permit (sponsored by employer); (ii) ICP residency visa (typically 2 years, linked to employment); (iii) Emirates ID. Work permits issued through Tasheel system. Categories: Standard (skill levels 1-5); Domestic (FDL 6/2020); Self-employment / Freelance permit; Golden Visa (10-year independent residency for high-skilled / investors / specialists under Cabinet Decision 65/2022).

Cabinet Decision 18/2022 + 49/2022 + later amendments: Emiratisation quotas apply to private-sector employers with 50+ workers — must increase Emirati workforce by 2% per year of skilled positions, target 10% by end of 2026. Non-compliance penalty: AED 96,000 per Emirati position not filled. Nafis programme provides salary support and training subsidies for Emirati hires. From 2024 quotas extended to employers with 20-49 workers in selected sectors. Free zones (DIFC, ADGM, others) generally exempt unless dual-licensed.

Yes — limited to specific cases. (i) Probation resignation to a UAE-based new employer (Article 9(4)) — original employer can claim recruitment / visa costs from the new employer. (ii) Training-cost claw-back clauses in employment contracts are generally enforceable for genuine training spend (specialised certifications, externally-provided programmes); courts read down excessive claims. (iii) Reimbursement of relocation costs where employee resigns within agreed minimum service period — enforceable if proportionate.

Federal Decree-Law 6 of 2020 governs domestic workers separately from FDL 33/2021. Coverage: 19 categories of domestic worker (housekeeper, cook, driver, gardener, etc.). Headline rights: written contract; minimum 1 day rest per week; 30 days paid annual leave; sick leave; up to 12 hours/day work with break; gratuity on the same basis as FDL 33; ban on retention of passports. Disputes resolved through MOHRE Domestic Workers Department.

FDL 33/2021 does not prescribe a specific collective-redundancy procedure. Termination on Article 42 grounds (insolvency, closure, force majeure) typically requires: (i) written notice; (ii) payment of all entitlements (notice, gratuity, accrued leave); (iii) MOHRE notification; (iv) cancellation of work permits. No specific consultation period or threshold for collective redundancies. Anti-discrimination Article 4 must be respected in selection.