HR Service FAQs

Does the employer have to cover the cost of an employee’s health insurance?

In Dubai, employers are required to provide health insurance cover for their employees. There is, however, no legal obligation for employers to provide health insurance cover for dependants of their employees, the responsibility lies with the employee (the visa sponsor).

As per Article 5 of the Abu Dhabi Health Insurance Law, Abu Dhabi employers are legally required to provide health insurance cover for their employees and their dependants. Dependants are defined as a spouse and up to 3 children under the age of 18. If the employee has other dependants then they are legally obligated to cover the cost of this themselves.

If you need assistance with staff, family and dependant visas and health insurance any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

Is the employer obliged to provide health insurance to an employee's stepchildren?

As there is no legal obligation for Dubai employers to provide health insurance cover for dependants of their employees, the responsibility lies with the employee (visa sponsor) to cover medical cover for their stepchild/children.

Abu Dhabi employers are legally obligated to provide health insurance cover for their employees and their dependants. If the stepchild/children are a dependent of the employee and under the age of 18 then the employer is legally required to cover the cost of medical insurance. The employer is obligated to cover health insurance for up to 3 children/stepchildren under the age of 18.

How do I calculate end of service gratuity for employees in UAE?

Under Article 134 of the UAE Labour Law, end of service benefit payment is calculated based on the employee’s basic salary.

When an employee resigns from an unlimited term contract, they will be entitled to a gratuity payment as per the following scale:

Less than 1 year of service
Where an employee leaves employment prior to completing one year of service they will not be entitled to gratuity payment
Between 1 year and 3 years of service
Employee is entitled to 7 days gratuity payment (One third of the 21-days gratuity pay)
Between 3 years and 5 years of service
Employee is entitled to 14 days gratuity payment (Two thirds of the 21-days gratuity pay)
5 or more years of service
Employee is entitled to the full 21 days gratuity pay for each year of service.

For Limited Term Contracts gratuity payments are calculated based on the below scale:

Less than 1 year of service
An employee who leaves employment prior to completing one year of service is not be entitled to gratuity payment
Between 1 year and 5 years of service
Employee is entitled to full gratuity pay based on 21 days salary for each year of work.
5 or more years of service
Employee is entitled to full gratuity pay based on 30 days salary for each year of work.

If you need assistance with gratuity calculation, staff, family and dependant visas or other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

How is the end of service gratuity calculated where the employer terminates the contract?

In the case that an employee is terminated from their position and has completed one year or more of continuous service, they will be entitled to a gratuity payment as follows

Between 1 year and 5 years of service
Employee is entitled to full gratuity pay based on 21 days salary for each year of work.
5 or more years of service
Employee is entitled to 21 days salary for between 1 year and 5 years and 30 calendar days for each additional year.

End of service gratuity must not exceed two years pay. Employees are not entitled to gratuity in the case that that they are terminated for gross misconduct under the provisions of the UAE Labour Law.

What must an employer include in a UAE employment contract?

Unlimited term employment contracts must include:

Conclusion of contract date
Commencement of work date
The nature of the work
Address of the workplace
Remuneration details

Limited term employment contracts must include:

Conclusion of contract date
Commencement of work date
The nature of the work
Address of the workplace
Remuneration details
Duration of the contract
The notice for termination of contract

If you need assistance with staff employment contracts, visas or other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

What is a limited employment contract?

Under the UAE Labour Law

The duration of a limited contract may not exceed two years (unlike four years as before)
The contract may be renewed by mutual agreement of the employer and employee
Should the contract be renewed, the new term shall be deemed an extension of the original term and shall be added to the calculation of the total service period of the employee.
Where the contract is not renewed it automatically cancels when it expires.

What is an unlimited employment contract?

Under the Labour Law, Article 39, an employment contract is considered an unlimited contract if it is concluded for an undetermined term. Simply put, an unlimited employment contract is one without a defined expiry date.

Do I need to hire an HR Manager for my Dubai company?

There is no legal requirement to hire a HR Manager for your Dubai Company. As an alternative to hiring a HR Manager you can opt to outsource your HR requirements.

Outsourcing your HR requirements to qualified specialists will save you time and resources enabling you to focus on core business activities. Outsourcing generally works best for small to medium sized companies who do not require an in-house HR Department.

If you are looking to outsource your companies HR or PRO functions and if you need assistance with any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

How can I outsource my HR function in UAE?

Companies can outsource HR requirements or their entire HR function through our managed HR Services department. Our dedicated team of experts offer professional HR services that are completely customised to company requirements. Services include; HR Admin Support, HR Consultancy, Payroll Management and Recruitment Solutions. Click here to find out more about our HR offering.

Do I have to provide employees with a yearly airfare allowance?

Annual airfare allowances are considered an employee benefit or bonus and are based on company compensation and benefits policies. Under the UAE Labour Law employers are not legally obligated to provide their employees with a yearly airfare allowance.

If you need assistance with employee / staff visa matters, or if you need assistance with any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

Can employers ask employees to use annual leave balances during the Covid 19 pandemic?

Employers are within their legal rights to ask employees to use their annual leave balances. This legal right was enabled by Ministerial Resolution no 279 of 2020 Article (2) on Employment Stability in Private Sector during the Period of Application of Precautionary Measures to Curb the Spread of Covid19. This legal right is further supported by the UAE Labour law whereby under Article 76, the employer may determine the commencement date of annual leave and, if required, divide the leave into not more than two periods.

How is redundancy processed in the UAE?

As per the UAE Labour Law, there is no statutory definition of redundancy or a procedure for the management of redundancy. Although in the past there have been labour cases whereby the labour court has recognised the employers right to restructure its business, employers are repeatedly advised to refer to the provisions on the termination of employment set out in the Labour Law when enquiring as to the process of redundancy.

How does the Ministerial Resolution No. 279, 2020 affect the process of redundancy?

Article No.3 of the Ministerial Resolution No. 279, 2020 provides guidelines for where an employer identifies a ‘surplus’ of non-national employees, presenting the concept of ‘redundancy’ to the UAE Labour Law for the first time.

Article No.3 of the resolution further details that:

Employers must register the surplus employee’s data on the MOHRE.’s Virtual Labour Market system where they can search for new employment.
Employers are required to provide accommodation and all other entitlements (except for salary) until the employee obtains new employment or leaves the country.

How can an employee’s contract be lawfully terminated?

Under the current legislation, there are two ways whereby an employer can lawfully terminate an employee’s contract.

Valid Reason
Reference to Article 117, an employer may terminate an employee with notice, as per their contract for a ‘valid reason’. Although a specific definition is not provided for the term ‘valid reason’ it is understood that the reason must be work-related, for example under performance or continued misconduct.
Gross Misconduct
Articles 88 and 120 set out the provisions in relation to the termination of an employee’s contract due to gross misconduct.

How does the Ministerial Resolution No. 279, 2020 affect employers and employees?

As part of the UAE Government’s support to employers in the UAE, the Ministry of Human Resources and Emiratisation (MOHRE) released the Ministerial Resolution 279/2020 effective March 26, detailing measures to support UAE private sector employers during the Covid-19 outbreak. Click here for the Resolution pdf.

The Resolution identified the actions listed below which should be followed in the order of:

remote working
paid leave
unpaid leave
temporary wage reduction
permanent wage reduction

The Resolution requires the respective employee’s agreement and consent to any employment contract changes and it is therefore suggested that all changes are reasonable and acceptable.

An important point to note in the resolution is the applicability to companies who have been ‘affected’ by precautionary measures that have been put in place to limit the spread of the novel Corona virus.

What happens if a staff member launches a case of unfair dismissal at the UAE Ministry of Labour Court?

If an employee believes that they have been unfairly dismissed they can file a complaint at the Ministry of Human Resources and Emiratisation. The MOHRE will try to solve the issue amicably but where this is not possible the case will be referred to court.

If unfair dismissal is proven, the employer will be instructed by the courts to pay compensation to the employee. The maximum compensation that the court will order the employer to pay is three months of remuneration which is based on the employees last salary.

The employee can then also claim their end of service gratuity, notice period payment and any other amounts owed to them by the employer such as accrued annual leave payment.

If you need assistance with employee / staff visa or labour matters, or if you need assistance with any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

What HR policies will I need to have in place in order to run my business and hire staff in Dubai or Abu Dhabi?

Private UAE employers including all companies set up in free zones other than DIFC, are legally required to comply with the employment legislation set forth in the UAE Labour Law No.8 of 1980. This employment legislation is the basis that employers should use for the development of company HR policies and procedures. Private employers set up in freezones must also comply with the relevant freezone’s rules and regulations.

We suggest that employers develop an in-house employment handbook to detail their company HR policies aligned to the UAE Labour Law and where applicable, the relevant freezone rules and regulations. Employment handbooks should typically cover policies and procedures related to:

Company Mission, Vision and Values
Conditions of Employment
Company Rules and Regulations
Leave
Compensation & Benefits
Performance Evaluation
Disciplinary & Grievance

The employment handbook should be communicated to all staff and be accessible in order to serve as a guide for both the employer and employees.

PPG can support with the development of such employment handbooks or standalone HR policies etc etc.

How do I manage onboarding a new staff member, what documents do I need?

Finalising the onboarding of a new staff member will require the processing of the employee’s residence visa application. Where applicable, the company may also process the residence visa application for the dependent(s) of the new employee.

As part of the visa application process the employee will have to attend a Medical Fitness Screening and the company will manage the Emirates ID card and Health Insurance applications. The documents required for the residence visa application of a new staff member include:

Original passport and original entry-work visa (if applicable)
Signed visa application form
Employee’s employment letter in Arabic with salary
Original letter of certification of medical screening test results
4 passport size photos with white background
Copy of the Insurance Health card provided by the company
Copy of Emirates ID card application stamped by the ID Authority

What are (outsourced) HR services?

Outsourced Human Resources Services allow companies to delegate their internal HR function to HR professionals to administer so they can focus on core business activities, ensure the company is compliant with local legislation and guarantee best practices are being followed.

If you are looking to outsource your companies HR or PRO functions and if you need assistance with any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

What are HR responsibilities?

The Human Resources core focus is to take care of employee relations and manage the employee life cycle which includes recruitment, selection, onboarding, training, performance management, disciplinaries, termination, compensation, benefits, and internal policies. Ensuring these elements are accurate will play a big part in retaining and attracting individuals to the company.

If you need assistance with your HR responsibilities, or any other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

Does my company need an employee handbook?

Regardless of the size of the company, an employee handbook is essential. Not only does it highlight mandatory regulations set out in the labour law, but it sets the tone of the company culture by informing employees what is expected of them through policies and procedures such as health and safety, working hours, discrimination, harassment, non-compete and many more. This will help your business run smoothly and prevent any future conflicts or disputes.

If you need assistance with employee handbooks, visas or other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

What is the new Limited Contract, and what is the deadline?

Companies should be informed that all employees under a fixed or unlimited term contract must be changed to a Limited Contract before the 3rd of February 2023. The contract applies to mainland and free zone entities. Some details on the new Limited Contract are as follows;

- Probation remains at a maximum of 6 months

- Notice during probation is 14 days for both parties

- Notice period can be 30, 60 or 90 days

- Employees can terminate the contract at any point as long as they serve their notice as agreed in their contract

- Renewable every two years

- Gratuity is paid at the full rate even if employees resign or are terminated

- 30 calendar days of annual leave

- Introduction of part-time and flexible work contracts under the Limited Contract

If you need assistance with staff employment contracts, visas or other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.

Who is exempt from the Unemployment Insurance Scheme?

The Unemployment Insurance Scheme is only application for employee’s in the private sector with a work permit registered with the Ministry of Human Resources and Emiratisation. All companies registered within freezones are currently exempt from the scheme. This applies to individual who have specific visas from freezones such as Freelancer Permits.

The notice period during a probation period has increased to a minimum of 14 days

Under the new Federal Labour Law No 33, both the employer and employee must give a minimum of 14 days written notice to terminate the employment contract. Should the employee wish to resign to join another company, they are required to give 30 days written notice. This should be clearly stated in all offer letters.

DMCC WPS Registration - Why is the bank asking me for a MOHRE number?

The Wage Protection System (WPS) has previously only been applicable to companies registered onshore in the Dubai Mainland. However, this has recently been introduced to the Dubai Multi Commodities Centre (DMCC) Freezone, and may be expected to be introduced to others. A common question arising with companies trying to register with the bank for WPS is being asked for their Ministry of Human Resources and Emiratization (MOHRE) number by the bank. Freezones are not regulated by MOHRE and don’t have this number. Instead you will need to provide the DMCC account number which can be found in the companies portal. The number will be 13 digits (DMCC+000+account number).