Critical 2026 Changes for Construction and Logistics Employers
Three developments in 2026 significantly affect construction and logistics companies operating in the UAE mainland:
Emiratisation Enforcement Escalation
Companies with 50 or more employees faced an 8% Emiratisation target on December 31, 2025, rising to 10% by December 31, 2026. Non-compliant companies now pay AED 9,000 monthly per unfilled Emirati position—AED 108,000 annually. MOHRE's AI-powered monitoring system detects fictitious Emiratisation schemes immediately, with Dubai Courts now prosecuting fake Emiratisation as criminal fraud.
Construction companies benefit from comparatively lower quotas due to industry reliance on expatriate skilled labour, but must focus Emiratisation on management positions: site supervisors, project managers, safety officers, and contract administrators. Project cycle volatility creates compliance challenges—companies winning large projects must rapidly increase Emirati hires to maintain the 2% annual growth ratio, while project demobilization that reduces Emirati headcount triggers penalties within two months if positions remain unfilled.
Logistics companies face designation as one of 14 priority sectors, bringing companies with 20-49 employees into scope. These smaller operators must employ two Emiratis by December 31, 2025 or pay AED 108,000 annually. Logistics companies should target operations management, fleet coordination, warehouse supervision, and customer service roles rather than commercial driver positions, where 24/7 shift requirements and cross-border assignments create practical barriers.
Nafis Programme Termination
The UAE government's Nafis programme, which provides up to AED 7,000 monthly salary support for hiring Emiratis, concludes at the end of 2026. Companies achieving compliance before programme termination benefit from substantial subsidy—up to five years of AED 7,000 monthly per Emirati employee, plus pension contribution coverage and training subsidies. Companies delaying Emiratisation until 2027 pay full employment costs without subsidy. For construction and logistics companies operating on modest margins, this represents the difference between manageable compliance cost and substantial burden.
January 1, 2026 also introduced a minimum wage of AED 6,000 monthly for Emiratis in the private sector. While Nafis subsidies offset this cost through 2026, the post-subsidy reality requires budget planning for full Emirati employment costs from 2027 onward.
Enhanced MOHRE Dispute Resolution Powers
The 2024 amendments to Federal Decree-Law No. 33/2021, now in full effect throughout 2026, grant MOHRE binding decision-making authority for employment disputes not exceeding AED 50,000. Construction companies managing large site workforces face particular exposure: when 20 workers each claim AED 15,000 in unpaid overtime, each claim falls within MOHRE's binding jurisdiction. MOHRE can issue 20 separate binding decisions, each enforceable within 14 days without court proceedings.
Logistics companies encounter similar risk with driver overtime disputes. A driver claiming two years of unpaid nighttime overtime premium (50% above regular rate) typically accumulates claims below AED 50,000, placing disputes within MOHRE's immediate enforcement authority.
MOHRE may also order employers to continue paying disputed employees' salaries for up to two months during investigation. For construction companies facing multiple simultaneous disputes, or logistics companies with high driver turnover, these salary continuation orders create significant cash flow impact even where the employer ultimately prevails.
The compressed 14-day MOHRE resolution window, followed by automatic court referral with three-day hearing scheduling and 30-day judgment requirements, eliminates the extended dispute timelines employers previously relied upon for settlement negotiations. Companies must respond to MOHRE complaints immediately with comprehensive documentation rather than pursuing delay strategies.
Understanding Federal Decree-Law No. 33/2021
Federal Decree-Law No. 33/2021 replaced Federal Law No. 8 of 1980 and became effective on 2 February 2022. The law applies to all private sector employees—both UAE nationals and expatriates—working for employers registered with the Ministry of Human Resources and Emiratisation.
The law does not apply to federal and local government employees, domestic workers (governed separately by Federal Decree-Law No. 9/2022), members of the armed forces, or employees in the Dubai International Financial Centre and Abu Dhabi Global Market, which maintain independent employment law frameworks.
For official UAE Government guidance, see Employment Laws and Regulations in the Private Sector.
The 2024 Amendments
On 12 August 2024, the UAE enacted Federal Decree-Law No. 9/2024, amending Articles 54 and 60 of the labour law with effect from 31 August 2024.
Article 54 amendments grant MOHRE authority to issue binding resolutions for employment disputes not exceeding AED 50,000. These resolutions carry "executive instrument force," meaning they can be enforced directly through execution proceedings without requiring separate court litigation. When MOHRE cannot resolve a dispute within 14 working days, the matter proceeds automatically to the labour court, which must schedule a hearing within three working days and render judgment within 30 days.
Additionally, MOHRE may now order employers to continue paying an employee's salary for up to two months during dispute resolution proceedings.
Article 60 amendments revised the penalty structure for labour law violations. Where violations previously attracted fines between AED 5,000 and AED 100,000, penalties now range from AED 100,000 to AED 1,000,000. Specific violations attracting these penalties include unauthorized employment, fictitious Emiratisation, closing operations without settling employee dues, and illegal employment of juveniles.
The complete text of Federal Decree-Law No. 33/2021 is available at UAE Legislation Portal.
DIFC and ADGM: Separate Legal Frameworks
Employers operating in the Dubai International Financial Centre or Abu Dhabi Global Market should note that Federal Decree-Law No. 33/2021 does not apply in these jurisdictions. DIFC employment relationships are governed by DIFC Employment Law No. 2/2019, while ADGM follows ADGM Employment Regulations 2019. Employers uncertain about which framework applies should seek legal clarification before taking employment action.
For guidance across all UAE employment law jurisdictions, visit Kayrouz & Associates Employment and Labour Law.
MOHRE Dispute Resolution Process
Binding Resolution Authority
Under amended Article 54, MOHRE possesses binding decision-making authority when:
- The disputed claim does not exceed AED 50,000
- The dispute concerns non-compliance with a prior MOHRE settlement
- The matter involves specific employment rights violations defined in the law
When an employee files a labour complaint falling within these categories, MOHRE attempts resolution within 14 working days. During this period, MOHRE may request documentation, conduct interviews, and propose settlement terms. MOHRE may also order the employer to continue paying the employee's salary for up to two months while the dispute remains unresolved.
If MOHRE resolves the dispute within 14 days, it issues a binding decision stamped with an executory formula. This decision carries the same enforcement weight as a court judgment. If MOHRE cannot resolve the dispute, it automatically refers the matter to the competent labour court.
Court Referral Timeline
Labour court proceedings following MOHRE referral operate under compressed timelines:
- Court must schedule the first hearing within three working days of receiving the referral
- Final judgment must be rendered within 30 days
- Any MOHRE salary continuation order remains in effect during court proceedings
Executive Instrument Force
A MOHRE resolution with "executive instrument force" functions identically to a final court judgment for enforcement purposes. If an employer fails to comply with the resolution, the employee may proceed directly to execution court to freeze bank accounts, attach company assets, impose travel restrictions on company officers, or initiate bankruptcy proceedings where amounts justify such action. No separate litigation is required.
Practical Implications
Construction companies managing large site workforces face particular exposure under the new MOHRE powers. When 20 site workers each file claims for AED 15,000 in alleged unpaid overtime—totaling AED 300,000 across the workforce—each individual claim falls within MOHRE's binding authority. MOHRE can issue 20 separate binding decisions, each enforceable within 14 days.
Logistics companies encounter similar risks with driver overtime disputes. A driver claiming two years of unpaid nighttime overtime premium (50% above regular rate) may easily accumulate a claim below AED 50,000, placing the dispute squarely within MOHRE's binding jurisdiction.
When main contractors face claims from subcontractor employees, the fact that workers were not directly employed provides limited protection. UAE labour courts increasingly permit workers to pursue claims against principal contractors when subcontractors default, particularly where the main contractor exercised control over work performance or benefited from the labour.
Further guidance on employment dispute procedures: UAE Labour Law Termination Process.
MOHRE complaint filing: MOHRE Portal.
Employment Contracts
Fixed-Term Contract Requirement
All UAE private sector employment contracts must be fixed-term agreements with maximum duration of three years. The concept of "unlimited" contracts was abolished when Federal Decree-Law No. 33/2021 took effect.
Contracts may be renewed for additional three-year terms, or for shorter periods, by mutual agreement. When both parties continue the employment relationship beyond the contract's stated expiry without executing a formal renewal, the law deems the contract automatically renewed under its original terms.
Notice Period Requirements
Notice period obligations differ between probation and regular employment.
During probation (maximum six months), employers must provide 14 days' notice for termination. Employees resigning to join another UAE employer must provide 30 days' notice or pay 30 days' salary in lieu. Employees leaving the UAE permanently need provide only 14 days' notice.
After probation concludes, standard notice periods range from 30 to 90 days as specified in the employment contract. The law caps enforceable notice at 90 days; contractual provisions requiring longer notice are void for the excess period. Either party may satisfy the notice obligation through payment of salary equivalent to the notice period.
Essential Contract Elements
Employment contracts must specify:
- Company legal name, license details, and employee identification
- Job title and detailed responsibilities description
- Basic salary amount, clearly separated from allowances
- All allowances itemized individually (housing, transportation, etc.)
- Working hours (maximum 8 hours daily, 48 hours weekly)
- Overtime compensation rates (minimum 125% for daytime, 150% for nighttime work between 22:00-04:00)
- Leave entitlements
- Contract duration (maximum three years) and renewal provisions
- Notice period for termination (30-90 days)
- Probation period terms if applicable (maximum six months)
- End-of-service gratuity calculation methodology
The critical distinction between basic salary and allowances affects end-of-service gratuity calculations. Only basic salary forms the calculation base; allowances are excluded.
Construction Sector Considerations
Construction companies must understand that project completion does not constitute automatic termination grounds. Even employees hired specifically for project-based work are entitled to notice periods specified in their contracts or payment in lieu thereof.
Proper project demobilization requires:
- Reviewing each worker's contract to identify applicable notice period
- Issuing written termination notices 30-90 days before intended final working day, or negotiating payment in lieu
- Calculating end-of-service gratuity for all terminated workers
- Processing final settlements within 14 days of termination
- Cancelling work permits within seven days of employees' final working day
For sites in remote areas not served by public transportation, employers must provide MOHRE-compliant accommodation meeting specified standards: maximum four workers per room, minimum 3.25 square metres per person, adequate sanitation facilities (one toilet per 15 workers, one shower per 20 workers), drinking water, food provisions, medical facilities for camps exceeding 100 workers, and transportation between accommodation and worksite.
Additional construction setup guidance: Construction Company Setup in Dubai.
Logistics Sector Considerations
Driver employment contracts require particular attention to:
- Express authorization for cross-border driving assignments
- Overtime procedures (drivers frequently exceed standard eight-hour days)
- Night work compensation (150% premium for hours between 22:00-04:00)
- Cross-border assignment allowances and accommodation provisions
- Vehicle assignment terms and accident liability allocation
Logistics companies operating 24/7 warehouse facilities must structure shift work complying with rest period requirements and rotation practices. While the law does not specify exact hours required between shifts, MOHRE guidance and best practice suggest minimum eight hours between shift end and next shift start, with 11 hours for shifts involving overtime.
Part-time warehouse workers receive pro-rated benefits based on contracted hours relative to full-time equivalents. A worker contracted for 24 hours weekly (60% of 40-hour full-time) receives 60% of full-time leave entitlements.
For official employment contract forms and work permit information: UAE Work Permits Portal.
Termination Procedures
Article 120 Misconception
Many employers search for "Article 120 UAE labour law" when researching termination and gratuity matters. This reflects outdated references to Federal Law No. 8 of 1980.
Under Federal Decree-Law No. 33/2021 (current law since February 2022):
- Termination without notice is governed by Article 44
- End-of-service gratuity is calculated under Article 51
Employers using templates or internal policies referencing "Article 120" should update these documents immediately. Reliance on superseded law creates enforcement risk.
Article 44: Termination Without Notice
Article 44 permits immediate employment termination without notice when an employee commits one of nine enumerated offenses:
1. False identity or forged documents
Employee assumes false identity or submits forged certificates or educational credentials.
2. Error causing material loss
Employee commits error causing material loss to employer, provided employer notifies MOHRE within seven working days. This ground requires actual quantifiable loss, causal connection between employee error and loss, MOHRE notification within seven working days, and documentation of loss amount.
The seven-working-day MOHRE notification requirement applies exclusively to this second ground. It is not a general requirement for all Article 44 terminations.
3. Safety instruction violations
Employee violates written safety instructions causing or potentially causing serious danger to the establishment, workers, or other persons.
4. Performance failure after written warning
Employee fails to perform basic work duties despite receiving written warning specifying required improvements and reasonable time for improvement.
5. Disclosure of confidential information
Employee divulges confidential work secrets, proprietary information, trade secrets, client lists, pricing strategies, or other commercially sensitive data that is genuinely confidential and not publicly available.
6. Criminal conviction
Employee is convicted of crime involving dishonor, breach of trust, or moral turpitude. Traffic violations and minor infractions do not qualify.
7. Workplace intoxication
Employee is found intoxicated or under influence of controlled substances during working hours.
8. Assault
Employee physically assaults the employer, a manager, a colleague, or any person during work or because of work.
9. Excessive absence
Employee is absent without valid reason exceeding 20 days during one calendar year (intermittent absences) or seven consecutive days (continuous absence).
Documentation Requirements
Employers invoking Article 44 must prepare:
- Written investigation report detailing the incident or conduct pattern
- Witness statements where applicable
- Warning letters for grounds requiring prior warning
- MOHRE notification for material loss cases (within seven working days)
- Termination letter explicitly stating which Article 44 ground applies
- Supporting evidence (CCTV footage, financial records, attendance logs, etc.)
The termination letter must identify the specific Article 44 ground with factual basis. Generic statements like "termination for cause" are insufficient.
Article 51: End-of-Service Gratuity
Every employee completing one year of continuous service earns end-of-service gratuity calculated exclusively on basic salary:
- Years 1-5 of service: 21 days of basic salary per year
- Years 5+ of service: 30 days of basic salary per year
- Maximum cap: Two years' worth of basic salary
Calculation method:
- Identify employee's basic monthly salary as stated in contract
- Calculate completed years of service
- Apply formula: (21 days × years 1-5) + (30 days × years beyond 5)
- Convert total days to months (divide by 30)
- Multiply months by basic monthly salary
- Apply two-year maximum cap if calculation exceeds 24 months' salary
Example calculation - seven years service:
Basic monthly salary: AED 15,000
- Years 1-5: 21 days × 5 years = 105 days
- Years 6-7: 30 days × 2 years = 60 days
- Total: 165 days ÷ 30 = 5.5 months
- Gratuity: AED 15,000 × 5.5 = AED 82,500
Common calculation errors that trigger disputes:
- Using total compensation package instead of basic salary
- Including housing, transportation, or other allowances in calculation base
- Failing to prorate final incomplete year
- Attempting to deduct training costs, recruitment expenses, or other employer expenditures
Gratuity cannot be reduced by amounts the employer claims to have spent on the employee unless a final court judgment specifically orders such deduction.
High-Risk Termination Scenarios
Construction: Project demobilization
When demobilizing 200 site workers upon project completion, gratuity obligations for workers with average three-year tenure typically exceed AED 500,000. Notice pay or payment in lieu adds substantial additional cost. These amounts must be budgeted into project closeout planning.
Main contractors also face claims from subcontractor employees when subcontractors fail to pay wages or gratuity. While contractual indemnities from subcontractors provide recovery rights, they do not prevent employees from pursuing direct claims against the principal contractor.
Logistics: Driver terminations
Logistics companies needing immediate driver replacements face tension between business urgency and legal notice requirements. Terminating drivers without proper notice (absent valid Article 44 grounds) creates wrongful termination liability exceeding the cost of temporary driver coverage during the notice period.
Cross-border drivers may claim additional compensation, allowances, or assignment premiums upon termination when contracts fail to explicitly specify all cross-border compensation elements.
Related guidance:
Working Hours and Overtime
Standard Working Hours
Federal Decree-Law No. 33/2021 establishes maximum working hours of eight per day or 48 per week. During Ramadan, working hours are reduced by two hours daily for all employees regardless of religion.
Employees working five consecutive hours must receive minimum one-hour rest break for meals and prayer. This break is unpaid and does not count toward daily working hours.
Overtime Compensation
Overtime requires employee consent and is limited to two hours daily except in emergencies. Overtime compensation is calculated as follows:
Step 1: Determine hourly rate
Monthly basic salary ÷ 26 working days = Daily rate
Daily rate ÷ 8 hours = Hourly rate
Step 2: Apply premium
Daytime overtime (before 22:00): Hourly rate × 1.25
Nighttime overtime (22:00-04:00): Hourly rate × 1.50
Example:
Employee with AED 10,000 monthly basic salary:
- Daily rate: AED 10,000 ÷ 26 = AED 384.62
- Hourly rate: AED 384.62 ÷ 8 = AED 48.08
- Two hours daytime overtime: AED 48.08 × 1.25 × 2 = AED 120.20
- Two hours nighttime overtime: AED 48.08 × 1.50 × 2 = AED 144.24
Senior management positions and certain executive roles may be exempt from overtime compensation where the employment contract explicitly provides such exemption and the employee exercises authority similar to the employer.
Leave Entitlements
The law mandates minimum leave provisions:
Annual leave: 30 calendar days per year after completing one year of service. Employees with less than one year accrue two days per month. Employers determine timing based on business requirements. Employees may request cash payment for up to 50% of annual leave each year. Upon termination, unused accrued leave is paid in cash.
Sick leave: 90 days per calendar year structured as 15 days at full pay, 30 days at half pay, and 45 days unpaid. Medical certification from licensed healthcare facilities is required.
Maternity leave: Female employees receive 60 days maternity leave: 45 days at full pay followed by 15 days at half pay. Leave may begin up to 30 days before expected delivery. Employers cannot terminate female employees during maternity leave except for valid Article 44 grounds.
Parental leave: Either parent receives five working days paid leave within six months of a child's birth.
Bereavement leave: Five days for death of spouse, three days for death of parent, child, or sibling.
Weekly rest: Minimum one paid rest day per week, typically Friday in the UAE.
International Labour Organization guidance on working time standards: ILO Working Time.
Wage Protection System
The Wage Protection System requires all private sector employers to pay employee salaries through approved electronic channels monitored by MOHRE. All WPS transactions are visible to MOHRE in real time, and any payment delays trigger automatic alerts and investigations.
Employers must register all employees in the WPS system, upload monthly salary information before the payment date, execute payments through approved channels only, and ensure payment dates align with employment contract terms.
WPS Penalties
First violation: AED 5,000 fine
Second violation: AED 10,000 fine and potential work permit restrictions
Third violation: AED 20,000 fine and work permit freeze
Repeated violations: Up to AED 100,000 and license suspension
Beyond financial penalties, WPS violations severely damage company classification with MOHRE. Companies in lower classifications face restricted work permit access, increased scrutiny, potential bank guarantee requirements, and reputational damage affecting client relationships.
Permitted Salary Deductions
UAE labour law strictly limits circumstances permitting salary deductions. Employers may deduct:
- Social insurance contributions for UAE nationals
- Court-ordered payments
- Loan repayments to the employer (maximum 10% monthly with written employee authorization)
- Accommodation or services provided by employer (maximum 5% with written authorization)
- Insurance premiums for employee benefits
- Union dues or savings fund contributions (with authorization)
Employers cannot deduct "fines" for performance issues, equipment damage costs, recruitment or training expenses, or administrative fees without either written employee authorization clearly specifying amount, purpose, and duration, or final court judgment ordering the deduction.
MOHRE guidance: MOHRE Definitions Portal.
Penalties for Non-Compliance
2024 Penalty Structure
Federal Decree-Law No. 9/2024 increased penalties for labour law violations:
Operational Consequences
Beyond monetary fines, violations trigger:
Company classification downgrade affecting work permit quotas and processing speed
Work permit freeze preventing hiring of replacement employees
License suspension or revocation for serious or systematic violations
Criminal prosecution for wage withholding, systematic illegal employment, or serious safety violations causing injury or death
Asset attachment and travel bans when employees obtain judgments for unpaid wages
Construction Sector Risks
Construction sites present elevated compliance risks:
- Heat stress policy violations (work prohibited 12:30-15:00 from 15 June-15 September): AED 5,000 per worker plus potential site closure
- Accommodation standard violations: AED 100,000-300,000 plus immediate accommodation closure and worker relocation orders
- Safety equipment and training deficiencies creating injury liability
- Subcontractor wage default exposing main contractor to direct claims from subcontractor employees
A serious accident triggers immediate MOHRE investigation. If violations contributed to the incident, penalties combine with potential criminal liability for responsible officers.
Logistics Sector Risks
Logistics operations face particular exposure from:
- Systematic driver working hour violations where entire driver fleet exceeds legal limits
- Inadequate overtime tracking creating retrospective payment obligations potentially spanning years
- Warehouse safety violations in 24/7 operations affecting multiple workers simultaneously
- Subcontracted delivery network failures where logistics companies face claims from drivers employed by delivery partners
Construction Sector Compliance
Occupational Health and Safety Requirements
MOHRE Ministerial Resolution No. 44 of 2022 establishes occupational health and safety standards for construction sites.
Heat stress policy: From 15 June through 15 September annually, construction work in open areas under direct sunlight is prohibited from 12:30-15:00. Employers must adjust work schedules, provide shaded rest areas, supply adequate cold water, conduct heat stress training, and maintain first aid facilities for heat-related emergencies. Violations result in AED 5,000 fine per worker found working during prohibited hours, potential site closure for repeated violations, and criminal liability if heat-related injuries or deaths occur.
Personal protective equipment: Employers must provide at no cost to workers: hard hats, safety shoes, high-visibility vests, work gloves, safety glasses or goggles, hearing protection in high-noise areas, respiratory protection for dusty environments, and fall protection equipment for work at heights. Workers must receive training on proper PPE use.
Site safety infrastructure: Construction sites require secure perimeter fencing, protected pedestrian walkways, adequate lighting, fire extinguishers and firefighting equipment, first aid stations with trained personnel, emergency evacuation plans and routes, and safety signage in multiple languages (minimum Arabic, English, Urdu, Hindi).
Labour Accommodation Standards
For construction sites in remote areas or when housing site workers, MOHRE standards mandate:
Facility requirements:
- Maximum four workers per room
- Minimum 3.25 square metres per person
- Adequate ventilation (natural or mechanical)
- Separate beds for each worker
- Lockers or storage for personal belongings
- Clean bathrooms and showers (one toilet per 15 workers, one shower per 20 workers)
- Kitchen or canteen facilities
- Recreational areas
- Medical clinic for camps exceeding 100 workers
- Fire safety systems and emergency exits
Hygiene standards: Regular cleaning and sanitation, pest control measures, potable water supply, proper waste disposal, and sewage systems meeting municipality standards.
Penalties for non-compliant accommodation: AED 100,000-300,000 fines, immediate accommodation closure orders, requirement to relocate workers to compliant housing at employer expense, work permit freeze until compliance achieved, and potential criminal prosecution for severe violations.
Comprehensive construction setup guidance: Construction Company Setup in Dubai.
Dubai Law No. 7/2025 Additional Requirements
Dubai Law No. 7 of 2025 Concerning Buildings and Construction Works in the Emirate of Dubai (effective 1 June 2025) imposes additional requirements on contractors operating in Dubai:
Document retention: Contractors must retain all project-related documentation, including employment records, for 10 years after project completion. This exceeds the general five-year federal retention period.
Staff certification: Specific construction positions require Dubai Municipality-approved certifications: site supervisors, safety officers, specialized trade workers (electricians, plumbers, HVAC technicians), and equipment operators. Employment of uncertified workers in positions requiring certification violates both federal labour law and Dubai construction law.
Logistics Sector Compliance
Driver Employment Regulations
Commercial drivers remain subject to standard UAE working hour limitations despite logistics companies' 24/7 operational requirements: maximum eight hours per day and 48 hours per week, with overtime limited to two additional hours daily except in emergencies.
Long-haul routes often require driving exceeding eight hours. Compliance strategies include:
Two-driver teams: Pairing drivers on long routes allows rest periods while maintaining vehicle movement.
Split shifts: Scheduling drivers for morning and evening periods with midday breaks.
Route optimization: Designing delivery routes completable within 8-10 hour windows.
Proper overtime documentation: When drivers work overtime, maintaining precise records of consent, hours worked, and overtime compensation paid.
Mandatory rest periods: Drivers must receive minimum one-hour break after five consecutive hours of driving, adequate rest between shifts (minimum eight hours recommended), and weekly rest day (minimum one day per seven-day period).
Night work regulations: Drivers working between 22:00-04:00 receive 150% overtime premium (basic hourly rate × 1.50), additional safety considerations, and rotation requirements where sustained night-only work should rotate among drivers.
Cross-Border Assignment Requirements
Drivers crossing UAE borders into Saudi Arabia, Oman, or other GCC countries require employment contracts explicitly addressing:
- Authorization for cross-border driving
- Border crossing procedures and documentation responsibilities
- Additional compensation for cross-border routes
- Insurance coverage confirmation for international operations
- Vehicle and cargo liability allocation
- Extended working hour provisions for border delays
- Accommodation arrangements during multi-day routes
Common cross-border disputes arise when drivers claim "international assignment allowances" not specified in contracts, disagreements over compensation for time spent waiting at borders, insurance claim responsibility for accidents occurring outside UAE, and visa and entry permit cost allocation.
24/7 Warehouse Operations
Logistics companies operating round-the-clock warehouse and distribution facilities must structure shift work complying with labour law requirements:
Shift rotation: Employees cannot work exclusively night shifts indefinitely on health grounds. Rotation between day and night shifts recommended every 2-4 weeks. Female employees cannot be compelled to work night shifts though may do so voluntarily.
Rest period minimums: While Federal Decree-Law No. 33/2021 does not specify exact hours required between shifts, MOHRE guidance suggests minimum eight hours between shift ending and next shift start, with minimum 11 hours for shifts involving overtime.
Part-time workers: Part-time employment contracts require specific weekly hours stated (e.g., "20 hours per week"), schedule specification or scheduling procedure, pro-rated benefits calculation methodology, overtime compensation provisions, and conversion to full-time terms if company offers such path.
Part-time employees receive proportional benefits: a worker contracted for 24 hours weekly (60% of 40-hour full-time equivalent) receives 18 days annual leave (60% of 30-day full-time entitlement) and 54 days maximum sick leave (60% of 90-day full-time entitlement).
Related guidance: Supply Chain Contract Disputes.
Employer Compliance Framework
Monthly Verification
Monthly HR operations should include:
- Wage Protection System salary transfers completed by contracted payment date
- No overdue salary payments
- WPS system updated with new hires, terminations, or salary changes
- Overtime hours accurately recorded and compensated at correct rates
- Leave balances updated
- Work permits valid with upcoming expirations identified
- New employment contracts signed and filed
- MOHRE company classification current
- No pending MOHRE complaints or investigations
Quarterly Compliance Audit
Every three months, conduct:
- Employment contract review (identify contracts expiring within six months)
- Theoretical gratuity liability calculation for all employees
- Accommodation inspection where applicable
- Disciplinary documentation review
- Subcontractor compliance verification (request proof of WPS compliance, verify work permits, check accommodation compliance)
- Safety record review (accident reports, near-miss incidents, PPE inventory, sample site inspections)
Annual Strategic Review
Once yearly, executive-level assessment should address:
- Contract template updates for law changes
- HR policy manual refresh
- Manager training on termination procedures, documentation requirements, and discrimination avoidance
- Emiratisation compliance assessment
- External legal compliance audit
For companies with 50+ employees or operating in construction/logistics sectors, annual external legal audits are recommended given labour law complexity and penalty magnitude.
Documentation Requirements
Each employee file should contain:
Pre-employment: Application, resume, educational certificates (verified copies), previous employment verification, reference checks, job offer letter signed by employee.
Employment relationship: Signed employment contract original, work permit copy, residency visa copy, Emirates ID copy, passport copy, pre-employment medical examination, bank account details for WPS.
Ongoing records: Contract amendments, salary revision letters, position change notifications, performance reviews (minimum annual), training completion certificates, leave applications and approvals, overtime authorization and timesheets, disciplinary warnings if any, employee policy acknowledgments.
Termination documents: Resignation letter (if employee-initiated) or termination letter (if employer-initiated), notice period documentation, exit interview notes, clearance forms, final settlement calculation, gratuity payment confirmation, work permit cancellation confirmation, relieving letter and experience certificate.
Record retention periods:
- General employment records: Five years after employment termination
- Construction projects in Dubai: 10 years after project completion (Dubai Law No. 7/2025)
- Wage payment records: Minimum five years (seven years recommended)
- Accident and safety records: 10 years
- Contracts and legal documents: Permanent retention recommended
When Legal Advice is Required
Immediate legal consultation needed (within 24-48 hours):
- MOHRE complaint filed against company
- Labour court summons received
- Planning to terminate 10 or more employees simultaneously
- Wage payment delays exceeding two weeks
- Serious workplace accident with injuries
- MOHRE inspection or investigation underway
- Dispute with departing senior employee
- Subcontractor employee claims against company
- WPS system alerts or company classification downgrade
- Discovery of systematic compliance violation
Proactive legal review recommended (schedule within 2-4 weeks):
- Drafting new employment contract templates
- Updating HR policies or employee handbook
- Implementing new termination procedures
- Managing difficult employee performance issues
- Structuring project-based employment
- Planning cross-border employee assignments
- Developing Emiratisation strategies
- Major company restructuring
Frequently Asked Questions
Is Article 120 still relevant in UAE labour law?
No. Article 120 referenced Federal Law No. 8 of 1980. Under Federal Decree-Law No. 33/2021 (effective February 2022), end-of-service gratuity is governed by Article 51, and termination without notice is governed by Article 44. Documents referencing Article 120 are outdated and should be updated.
Can MOHRE force salary payment during disputes?
Yes. Under 2024 amendments, MOHRE may order continued salary payment to employees for up to two months while disputes remain unresolved. Employers must comply even while contesting the underlying claim.
What is the maximum enforceable notice period?
90 days. Contractual provisions requiring longer notice periods are void for the excess portion.
Must employers notify MOHRE before every termination?
No. The seven-working-day MOHRE notification requirement applies exclusively to Article 44(2) terminations based on employee error causing material loss. Other terminations do not require advance MOHRE notification.
Can employers deduct training costs from end-of-service gratuity?
No. Gratuity cannot be reduced by training costs, recruitment expenses, or other amounts absent a final court judgment specifically ordering such deduction.
What is the penalty for late work permit cancellation?
AED 100,000. Additionally, the employee's work permit and residency remain valid until cancelled, creating ongoing liability if the employee engages in activities under the company's sponsorship.
Do DIFC and ADGM companies follow federal labour law?
No. DIFC follows DIFC Employment Law No. 2/2019. ADGM follows ADGM Employment Regulations 2019. Federal Decree-Law No. 33/2021 does not apply in these jurisdictions.
Can employers terminate employees who file MOHRE complaints?
Terminating an employee during or shortly after they file a MOHRE complaint creates strong presumption of retaliation prohibited by Article 47. Even where valid Article 44 grounds exist, such terminations face extreme scrutiny. Legal advice should be sought before proceeding.
How is overtime calculated for salaried employees?
Monthly basic salary ÷ 26 working days ÷ 8 hours = hourly rate. Daytime overtime: hourly rate × 1.25. Nighttime overtime (22:00-04:00): hourly rate × 1.50.
What is "executive instrument force"?
MOHRE resolutions with executive instrument force can be enforced directly through execution proceedings without requiring separate litigation. The resolution itself provides the enforcement basis.
Legal Services
Kayrouz & Associates provides comprehensive employment law services for UAE employers:
Contract and policy development:
- Employment contract templates for construction, logistics, and other sectors
- Employee handbook drafting
- Termination procedure manuals
- Disciplinary policy frameworks
- Emiratisation compliance programs
Compliance and audit services:
- Employment law compliance audits
- End-of-service gratuity provision reviews
- MOHRE company classification improvement
- Subcontractor labour compliance verification
- Accommodation standards review
- Documentation audit and record retention verification
Dispute resolution and litigation:
- MOHRE complaint representation
- Labour court litigation in Dubai, Abu Dhabi, and other emirates
- Wage dispute negotiations
- Wrongful termination defense
- Injunction proceedings for non-compete and confidentiality breaches
Strategic HR support:
- Mass termination procedures for project demobilization or restructuring
- Senior employee termination strategy
- Cross-border employee arrangements
- Merger and acquisition employment due diligence
Industry Focus
Construction: Project demobilization procedures, subcontractor labour risk management, site safety compliance, accommodation facility audits, Dubai Law No. 7/2025 compliance integration, large-scale workforce management systems.
Logistics: Driver employment contracts, cross-border assignment structures, 24/7 warehouse shift work compliance, part-time and seasonal worker management, fleet operation employment structures, overtime calculation verification.
Fee Structures
- Hourly rates for advisory and document review
- Fixed fees for contract template packages, employee handbooks, and compliance audits
- Monthly retainer for ongoing employment law support (recommended for employers with 50+ employees)
- Success fees for litigation and complex dispute resolution
Contact information:
- Employment and Labour Law practice: Kayrouz & Associates Employment Law
- General inquiries: Contact Us
- Emergency support for retainer clients: 24/7 hotline for urgent MOHRE complaints, court summons, or workplace accidents
Related practice areas:
Conclusion
Employment law compliance in the UAE transformed from administrative obligation to strategic risk management priority following the 2024 amendments to Federal Decree-Law No. 33/2021. MOHRE's binding decision-making powers compress dispute resolution timelines from months to days. Penalties increased tenfold. Work permit freezes, salary continuation orders, and classification downgrades create operational disruption beyond monetary fines.
For construction companies managing project-based workforces, proper demobilization procedures and subcontractor compliance verification are essential. Project completion does not constitute automatic termination grounds; notice periods must be observed or paid in lieu.
For logistics companies, driver working hour compliance requires systematic tracking. Cross-border compensation terms must be explicitly contracted. 24/7 warehouse operations need structured shift rotation and rest period compliance.
Annual employment law compliance audits are recommended for companies with 50 or more employees or operating in construction and logistics sectors. The cost of professional compliance review represents sound risk management when measured against potential penalties ranging from AED 100,000 to AED 1,000,000 per violation
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