Update to UAE Part Time Working Regulations

UAE

In order to improve the flexibility in the labour market, cut costs and make use of human resources within the UAE, the MHRE issued Ministerial Resolution No. 31 of 2018 (the Resolution) which came into force at the beginning of March 2018.

The Resolution, for the first time, formally acknowledges the concept of part time employment for employees in the UAE and distinguishes between primary and secondary employers for employees undertaking work for more than on employer.

The Resolution sets out conditions for part-time working and covers employer responsibility for employee benefits and entitlements. 

Introduction and Background

Previously, under the UAE immigration law, employees could only work for the employer sponsoring their visa (their Sponsor), unless an exemption was obtained from the Ministry of Human Resources and Emiratisation (the MHRE). This exemption, which took the form of a temporary work permit issued by the MHRE, allowed the employee to work for an entity other than their Sponsor. These temporary work permits were not commonly requested as they required the employee to first obtain a no objection letter from their Sponsor.

Part-time work is also not formally recognised under the Federal Law No. 80 of 1980 (the Labour Law).

In order to improve the flexibility in the labour market, cut costs and make use of human resources within the UAE, the MHRE issued Ministerial Resolution No. 31 of 2018 (the Resolution) which came into force at the beginning of March 2018.

Distinction between a Primary and a Second Employer

The Resolution distinguishes between “primary” and “secondary” employers. The primary employer is the first employer who recruits and/or engages the employee. Secondary employers are employers other than the primary employer who have established an employment relationship with the employee at the same time of his engagement with the primary employer.

The primary employer is responsible for all sponsorship related costs and statutory and contractual benefits which are to be provided on a pro-rata basis. This includes end of service gratuity, annual leave, the provision of medical insurance and other benefits granted under the Labour Law.

The secondary employer is obliged to pay salary for the hours the part-time employee has worked and cover costs associated with the part time work permit. However, there is no obligation to pay any additional benefits. This is surprising as it may imply that the secondary employer may provide benefits which are less than the basic requirements under the UAE Labour Law - Federal Law No. 8 of 1980 (as amended), even when combined with the benefits granted by the primary employer (which only has to pro rata these). However, the secondary employer and the part-time employee may contractually agree on additional terms in respect of the employment, which could cover additional benefits.

There is no longer a requirement for an employee to request a no objection letter from the primary employer in order to undertake work for secondary employers. No employer may prevent a part-time employee from undertaking work for another employer (even for a competitor) unless a court order is issued stating otherwise.

Conditions for Part-time Employment

The Resolution allows Emiratis and certain expatriates to legally work for more than one employer at the same time so long as:

  1. if the individual is an expatriates, they are a first or second tier worker (i.e. individuals who hold university degree or higher or have completed a diploma in any technical or scientific field);
  2. the individual is employed on a part-time employment contract (less than 48 hours per week) with their primary employer;
  3. the individual obtains a part time work permit from the MHRE;
  4. the individual works no less than 20 hours per week with the primary employer (though they may work 60 hours a week in the case of an emergency); and
  5. the individual does not work more than 48 hours a week or more than 144 hours every three weeks (unless an exception is obtained from the MHRE) in total for all employers.

It is worth noting that the MHRE will notify the primary employer and the secondary employer if an employee is issued with a part time work permit. So even though the primary employer cannot prevent the employee working elsewhere, they will be notified of the arrangement.

It is likely that the MHRE will introduce a prescribed form contract for part-time employees. Further details of this are awaited.

Issues and Risks

There are a number of areas where it remains to be seen how the Resolution will be implemented in practice. In particular, the split of responsibility for benefits between the primary and secondary employers, such as the provision of medical insurance, which is a legal obligation under the Labour Law.

Further issues relating to the new arrangements include:

  1. the application of restrictive covenants (if applicable);
  2. protecting confidential information of each employer;
  3. managing conflicts between the primary and secondary employers, particularly if they are competitors;
  4. ensuring employees receive their full entitlements under the Labour Law; and
  5. monitoring of hours worked for employees working for more than one employer.

Conclusion

The Resolution opens up opportunities for employees to formally work for more than one employer in the UAE without a no-objection letter from the primary employer, which is a significant change from the current position.

This will employers to engage individuals on a part time basis, thus significantly reducing their employment costs, and allows individual employees to still work on a full time basis by holding more than one role.

There are a number of areas that will need to be clarified to ensure that employees are still offered the full protection granted to them under the Labour Law. Employers should be aware of the potential risks in having part time employees, and consider implementing a Part-Time Workers Policy.

Please contact us if you have any additional queries, or would like assistance preparing a Part Time working policy.