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Ras Al Khaimah: Labour Regulation

Regulatory Environment

Administered by the Federal Ministry of Labour and Social Affairs, Labour Law in the UAE is loosely based on the International Labour Organisation's model. UAE Law No. 8 of 1980, as amended by Law No. 12 of 1986 (the "Labour Law") governs most aspects of employer/employee relations, such as hours of work, leave, termination rights, medical benefits and repatriation. The Labour Law is protective of employees in general and overrides conflicting contractual provisions agreed under another jurisdiction, unless they are beneficial to the employee.

The Ministry issues a model form of labour contract in Arabic which is widely used, but other forms of contract are enforceable, provided they comply with the Labour Law. End of contract gratuities are set at 21 days’ pay for every year of the first five years of service and 30 days for every year thereafter. Total gratuity should not exceed two years' wages. Employees are entitled to pro-rated amounts for service periods less than a full year, provided they have completed one year in continuous service.

Trade unions do not exist. In the case of a dispute between employer and employee, or in interpretation of the Labour Law, the Ministry of Labour and Social Affairs will initially act as an adjudicator, in an effort to resolve matters. If a party wishes to appeal any such decision it can take its case to court. Strikes and lock outs are forbidden.

The normal maximum working hours are eight per day or 48 per week. However, these hours may be increased to nine daily for people working in the retail trade, hotels, restaurants and other such establishments. Similarly, daily working hours may be reduced for difficult or dangerous jobs. Many businesses work on a two shift system (for example, 8am - 1pm and 4pm - 7pm). As in all Muslim countries, Friday is the weekly day of rest. In practice, commercial and professional firms work 40-45 hours a week and government ministries about 35. The weekend for office workers has traditionally been Thursday afternoon and Friday, but a number of organisations have changed over to a five day week with Friday and Saturday as the weekend. During the Muslim holy month of Ramadan, normal working hours are reduced by two hours per day.

There are 10 days of public holidays (paid) in any year. The employee's annual leave is two days for every month if his service is more than six months and less than a year. In every completed year of service after the first, an employee is entitled to 30 days annual paid leave. This is in addition to public holidays, maternity leave for women and sick leave.

Overtime is used extensively and additional pay is required for manual and lower ranking staff.

These labour laws are also enforced under the Ras Al Khaimah rules and regulations, which also stipulate that overtime shall be paid at the rate of 25% more of the basic hourly rate, and that overtime worked on Public Holidays shall be paid at the rate of 50% more of the basic hourly rate. Shift working of employees in any part of the Free Zone must also be notified to the Free Zone Authority in respect of number of shifts, hours and numbers to be employed per shift.

Free Zone Licensees who recruit employees under the sponsorship of the Free Zone Authority are responsible to bear the following costs:

  • Cost of processing the Entry Permit
  • Cost of air ticket from the employee’s point of origin
  • Cost of processing the Residence Permit
  • Cost of Health Card, medical check-up and finger printing
  • Cost of renewal of Residence Permit and Health Card (including the cost of Medical Fitness Certificate)
  • All medical expenses incurred by the Employee during the sponsorship.

Under the Free Zone rules and regulations, these costs cannot be charged to the employee, nor deducted from their salary.

All sponsored employees must sign an employment contract and have it attested by the Free Zone on remitting the prescribed fee. Those who are exempted from providing a bank guarantee are required to sign an undertaking in lieu of the employment contract to the effect that they shall not make any claims against the Free Zone Authority as Sponsor. The effective date of the contract shall be the date of entry on the employment visa, or with the transfer date at Immigration.

Salary and other employee benefits may be negotiated between the employer and employee. But, the minimum salary acceptable to the Free Zone Authority for sponsored staff is AED500 per month plus food, accommodation and transport.

Proof of payment and receipt of salary must be submitted by the employer to the Free Zone Accounts Department upon request. Failure to prove the payment of salary will result in sanctions from the Free Zone.

Every worker in the Free Zone is entitled to a period of annual leave of not less than 30 days per year provided the worker’s service is more than six months.

  • A contract of employment may be terminated in any of the following cases:
  • By mutual agreement between the employer and employee and with the approval of the Free Zone Authority.
  • By the employee or employer during, or at the end of the probationary period (without notice).
  • By the employee or employer giving 30 days’ notice in writing (after the probationary period).
  • On expiry of the service period prescribed in the contract, provided 30 days’ notice not to renew is given by either party.
  • If the employee dies during service
  • Illness of, or injury to, the employee resulting in a total incapacity to work (which is subject to the provision of a medical report by an acceptable Authority).

An employer or employee shall be entitled to 30 days’ notice before termination of service. The employee shall be entitled to full pay during the notice period. The employee may be required to work during the notice period should the employer so wish.

The government of Ras Al Khaimah offers specific needs-based assistance to all investors with regards recruitment. The government also provides assistance for arranging employee accommodation for expatriate personnel.

 

 

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