Legal Consultation: Labor Law

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Legal Advisory: Labour Law in Dubai

Labour regulations in Dubai, for both Mainland and Free Zone companies, are primarily governed by Federal Decree Law No. 33 of 2021, which came into force on February 2, 2022, replacing the previous framework.

While Free Zones may implement additional rules or internal labour codes (e.g., DIFC, DMCC, JAFZA), they are still required to comply with federal minimum standards for employee rights.

Below is a clear summary of the core legal provisions:

1. Employment Contract (Mandatory)

All employment must be formalised through a written contract, registered either with:

  • The MOHRE portal (for Mainland companies), or

  • The relevant Free Zone authority

There are two types of contracts:

  • Fixed-term contracts: maximum of 3 years, renewable

  • Open-ended contracts: abolished since 2022

2. Working Hours

  • Standard working hours: 8 hours per day, 48 hours per week

  • In certain sectors (e.g., hospitality, security), hours may differ

  • During Ramadan, working hours are reduced by 2 hours per day

3. Probation Period

  • Maximum probation period: 6 months

  • Employers may terminate employment with 14 days' notice

  • Employees may resign with 14 to 30 days’ notice, depending on transfer circumstances

4. Annual Leave

  • 30 days of paid annual leave after one year of service

  • Pro-rated leave applies if less than one year of service

  • Public holidays are paid in addition to annual leave

5. End-of-Service Benefits (Gratuity)

After completing one year of service, employees are entitled to:

  • 21 days of basic salary per year (for the first 5 years)

  • 30 days per year after 5 years

  • Calculated only on basic salary, excluding bonuses, allowances, or housing

6. Termination and Resignation

  • Must be carried out with written notice (between 30 to 90 days)

  • Termination without valid cause may entitle the employee to compensation

  • Employers may not retain the employee’s passport

7. Salary Payments and WPS (Mainland Companies Only)

  • Salaries must be paid via the Wages Protection System (WPS), monitored by MOHRE

  • Late or non-payment may result in fines and license suspension

8. Protections and Prohibitions

  • Child labour is prohibited (under age 15)

  • Protection against harassment, discrimination, and retaliation

  • Disputes should be submitted to:

    • MOHRE for Mainland companies, or

    • The respective Free Zone Authority for Free Zone companies

Special Case: Independent Free Zones

DIFC (Dubai International Financial Centre) and ADGM (Abu Dhabi Global Market) operate under separate labour laws based on English common law principles. Key distinctions include:

  • Greater contractual flexibility

  • Broader autonomy in employer–employee agreements

  • Stricter requirements for data protection and HR compliance

Conclusion

Dubai’s labour regulations are modern, well-structured, and designed to protect both employers and employees. However, compliance requires attention to detail.

Key best practices include:

  • Ensuring proper contract registration

  • Avoiding abusive practices (e.g., unlawful deductions or passport retention)

  • Adapting policies to the specific rules of the Free Zone where the company is established

For employers operating in Dubai, a proactive and compliant HR framework is no longer optional—it's a competitive advantage.