UAE and DIFC Labor Laws

The United Arab Emirates federal law no. 8 of 1980 has for a long period of time been the only statue regulating employment affairs in the entire UAE. The law is generally called the Labour law. However the introduction of the Dubai International Financial Centre (DIFC) in 2004 which up to date is perceived to have viable potential of initiating its own legislation applicable within the DICF prevailed over the UAE law. It in fact enacted its own Employment Law No. 4 in 2005 commonly referred to as the DIFC Law with the aim of ensuring that workers within the DIFC were subjected to minimum international standards and employment terms. A casual view at the two laws; the labour law and the DIFC law, depicts no difference although a detailed overview of the two brings out vital discrepancies amid the two. This research paper seeks to highlight the key differences amid the two sections of legislation (Davis, 1999).

The first discrepancy between the two laws is depicted in the probation periods for employees. The labour law exclusively permits the provision of probationary time frame of six months to be imposed on novel employees. During this period or upon its completion, the employer is at liberty to terminate the employee without notice. On the other hand, the DIFC law does not give a specific probation period. Instead, it recommends minimum notice requirements depending on the period of time the worker has been employed. The probation period is meant to avail the employer with adequate opportunities to evaluate the competence of an employee in the field in which he or she has been recruited. It also mandates the employer to terminate an employee without notice if he or she deems the services provided by the employee are not satisfactory. Essentially, the labour law has set a specific period of time for such assessment while the DIFC consent to the employer determining the time frame for this activity(Human rights watch, 2007).

The other difference amid the two laws is on provisions of gratuity. Both the Labour law and the DIFC law include the gratuity provisions in that every worker is guaranteed a lump sum imbursement benefit ensued by termination of their respective employment. The amount of money is calculated according to the period of employment such that both laws pay twenty one days’ basic salary for the initial five years and thirty days’ basic salary for a period of service beyond five years. The difference between the two laws however is in the reductions in the benefits imbursement when a worker resigns or terminates his or her services. As far as the Labour law is concerned, such a scenario warrants gratuity reduction by two thirds for employees who have worked for one to three years and by one third for employees who have been of service for three to five years. The law requires that no gratuity reduction be made for employees who have worked for more than five years and have decided to quit. The DIFC Law on the other hand provides no such reduction enabling employees who have resigned or have been terminated to enjoy their full gratuity. The DIFC Law therefore is employee friendly as far as gratuity reductions are concerned (Davis, 1999).

Concerning female employees, the Labour Law allows forty five days’ maternity leave with full salary for employees who have served for one year or more continually. Female employees who have worked for less than one year are entitled to forty five days’ maternity leave at half pay. DIFC Law on the other hand stipulates that a female employee who has worked for at least twelve months is entitled to ninety days maternity leave. The first forty five days are at full pay and the remaining forty five days are granted at half the pay. Nevertheless, female employees who have been employed for less than one year are not entitled for pay during their ninety days maternity leave.

Article 120 of the Labour Law outlines a comprehensive list of situations that may warrant an employer to terminate the services of an employee without prior notice or benefit of gratuity. The DIFC Law however provides no such instances and therefore encourages the employer to dismiss an employee without prior written notice or gratuity benefit. The employer in this circumstance is at liberty to terminate the services of an employee when he or she believes that the conduct of the employee warrants it (Davis, 1999). The DIFC Law therefore avails the employer the mandate to determine the kind of conduct he or she perceives as inappropriate to guarantee summary dismissal without gratuity benefit or notice (Human rights watch, 2007).

Finally, the Law clearly stipulates that when an employer dismisses an employee on grounds not related to his or her competence, then the employee is entitled to full pay for a maximum of three months. DIFC Law on the other hand provides no provisions for compensation to employees in instances of arbitrary dismissal or redundancy. Nevertheless, the director of employment standards in the DIFC is mandated by the law to award compensation to terminated employees if he or she believes that the worker was dismissed unfairly (Davis, 1999).

To conclude, it is evident that even though several concepts of the law are applicable in the two laws; Labour Law and DIFC Law, a number of these perceptions differ. It is also apparent that some concepts of the DIFC Law are quite beneficial to the employer while others are favourable the employee. For instance the section that entails the probation period to employees greatly favour the employer at the expense of the employee. The section of DIFC Law that regulates the provision of gratuity to a large extent favours the employee more than the employer. Similarly some of the Labour Law applications favour the employee at the expense of the employer and vice versa. In the contemporary United Arab Emirates, broad discussions and views are being put together by the legislators to modernize its labour law. This is intended to ensure that the working conditions in the region are favourable to both the employer and the employee (Davis, 1999).

Works Cited

DAVIS, J. E. (1999). The labour laws. London, Butterworths.

http://www.gale.com/ModernLaw/.

Human Rights Watch (Organization). 2007. The UAE’s draft labor law Human Rights Watch’s

comments and recommendations. [New York]: Human Rights Watch.