Jobs in Dubai - The Impact of Labor Laws

Finding the perfect job in Dubai can offer its own set of unique challenges.  The UAE has not been immune to the global economic crisis and competition for available jobs is stiff.  In addition, labor laws in the UAE can be confusing and seem to be in a constant flux.   By educating themselves on the basics of UAE labor law, employees can avoid many common pitfalls that may arise during their time working in Dubai.

Rights that job seekers take for granted in their home country may not necessarily apply in Dubai.  For example, there are no anti-discrimination laws in effect and employers can request anything from a certain nationality or age group to a certain appearance.  There is also no minimum wage.  An employee's nationality is often a determining factor in the amount of pay offered, with Europeans and Arabs on the higher end of the scale and Asians on the lower end.   Because changing jobs in Dubai is not a straightforward process, it is a common (although illegal) practice for some employers to hold employee passports as security against absconding.  

An expatriate's right to live and work in the UAE is tied to their sponsor, in this case the employer.  Once a job seeker is hired, an employment contract will be signed.  The contract is either fixed term or unlimited term.  A fixed term contract means that there is a specified start date and end date.  The contract cannot exceed three years, but can be renewed.  Unlimited term contracts list a start date but are open-ended.  They may be terminated by mutual consent or by either party giving 30 days notice.  A new employee may undergo a probationary period of not more than six months.  During this time the employee can be dismissed without reason or notice and he or she will not be entitled to any end of service benefits.  Contracts may also include a competitive clause which states an employee cannot work for a competitor for up to two years. 

Once a contract is signed the employee is legally bound to fulfill it. While laws regarding sponsorship have eased, allowing employees some movement between jobs if certain conditions are fulfilled, it still can be a challenging process.  In most cases, in order to transfer to a new job the employee must complete one full year of service at their current position and obtain an NOC (No Objection Certificate) from their current employer.  The NOC states that the employer releases the employee from any contractual obligations.  If an employee's work permit is cancelled without the NOC, a six month ban will be issued against the employee.  This means that while they can reenter the UAE on a visit visa during the ban, they will not be issued a new work permit for six months.  There are certain categories of workers who are exempt from these rules, including employees of government departments and Free Zone areas (such as Dubai Media City, Knowledge Village, and Internet City).  Free Zone workers are not under an individual company’s sponsorship, but under the sponsorship of the entire Free Zone area itself.  As such, they can transfer to a new job within the same Free Zone without an NOC.  Employees sponsored by their spouses also have greater freedom of movement between jobs.

While Dubai offers an exciting, multi-cultural work environment coupled with tax free income, employees do need to be aware of how job regulations can affect them.  The government of Dubai is currently reviewing labor laws, particularly the six month ban rule, in light of the current global economy.  Changes giving workers more rights and greater flexibility to move from one job to another may be on the horizon.