Guide to the UAE Labor Law for Construction Companies - Firstbit Blog
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Advice on the UAE Labor Law for Construction Businesses by Mohamed Nour
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Advice on the UAE Labor Law for Construction Businesses by Mohamed Nour

Published 25 May 2024
The discussion on UAE Labor Law for construction companies primarily focuses on workers' rights, but it also emphasizes specific requirements that construction companies need to observe. In this article, we dive into the most important points of the law with Mohamed Nour, a seasoned legal expert with extensive experience in corporate, commercial, and intellectual property law. His work spans across multiple jurisdictions, including Libya, Egypt, the UAE, and Oman. Currently, Mohamed serves as the Legal Advisor at Al Barakah Holding Company.

This guide is designed to provide you with expert insights on how to protect your business from legal issues. Understanding these laws will not only ensure your compliance but also put your company in a strong position for continued growth in the flourishing UAE construction market.

Introduction to the UAE Labor Law in Construction

The UAE is highly regarded for its adherence to the rule of law, with interconnected governmental systems across all ministries. If a company commits a violation, the system automatically blocks its account until the violation is rectified and any fines are paid. Violations are typically identified through inspections or reports from employees or third parties with evidence.

Companies are expected to comply with all laws, regulations, and authoritative instructions. They must also ensure that their employees are informed of these regulations by including a list of violations and corresponding penalties in their internal bylaws. These bylaws should be displayed prominently within the company to ensure all employees are aware of and adhere to them.

Top 3 Legal Compliance Requirements

The UAE Labor Law mandates specific legal compliance requirements for construction companies. Here, we highlight the three most critical ones:
Employers are mandated to adhere to stringent safety protocols, encompassing educational initiatives to enhance workers' safety awareness and compliance with safety guidelines. This includes providing educational lectures, promoting safety methods, and ensuring the correct usage of safety equipment and attire.
The UAE Labor Law underscores the importance of providing suitable accommodation for workers. Employers must ensure that workers are housed in approved accommodation camps, failing which could result in the non-renewal of the employer's trade license.
The law safeguards workers' financial interests by enforcing timely wage payments. Employers are obligated to disburse wages by the 14th of each month, with penalties imposed for any delays beyond this timeframe.

Key Protections And Rights

Encompassing a range of provisions, this comprehensive legislation serves to empower workers across the construction industry. There are some key rights guaranteed under the UAE Labor Law:
Passport retention. Workers have the unequivocal right to retain possession of their passports at all times. Employers are prohibited from withholding passports, with strict penalties imposed for non-compliance.
Employment mobility. Upon contract expiration or termination, workers possess the freedom to seek alternative employment opportunities, providing flexibility and autonomy in their career paths.
Timely wage payments. The law mandates timely payment of wages, stipulating that employers cannot delay salary disbursements beyond the 14th of each month. Failure to adhere to this results in financial penalties for employers.
End of service gratuity. Workers who have diligently served for a year or more are entitled to end-of-service gratuity, recognizing their commitment and contribution to their employers.
Summer break for outdoor workers. Particularly crucial for construction workers, a mandatory break is enforced during the scorching summer months, between 12:30 PM to 3:00 PM. Employers must adhere to this regulation to safeguard workers' health and well-being.
Accommodation standards. Employers are obligated to provide suitable and approved accommodation for their workers in labor camps. Failure to comply with this requirement may lead to the non-renewal of the employer's trade license.
Overtime pay. The legislation also provides details such as overtime or pay on weekends and public holidays. Thus, if employees work overtime, they get extra pay at 125% of their regular wage. And if they work on holidays or rest days, it goes up to 150%.

Health And Safety Regulations

In the construction industry, health and safety regulations are crucial. Key violations include not wearing mandatory safety equipment such as helmets, safety shoes, and belts, and failing to place necessary safety signage like safety tape and guide signs.

Critical health and safety provisions under UAE Labor Law specific to construction include:
Mandated breaks. Construction workers exposed to direct sunlight are required to take breaks during the hot summer months from 12:30 PM to 3:00 PM to ensure their well-being.
Accommodation requirements. Construction companies must provide adequate housing for their workers in officially approved accommodations (such as labor camps) as a condition for renewing their trade licenses.
These regulations apply to all sectors but have specific applications in construction to address the unique hazards of the industry.

Resolving Disputes

In the construction sector, when disputes arise between employers and employees, a structured resolution process is followed. Initially, an employee with a grievance can file a complaint with the labor office, which then intervenes by contacting the employer to mediate and resolve the issue amicably. If the mediation fails and no agreement is reached, the labor office takes the next step by referring the dispute to the labor court for a formal resolution.

Additionally, in cases involving work injuries, there is a specific mechanism in place if the construction company carries workman’s compensation insurance. Under this scenario, instead of the company, the insurance provider is responsible for settling any claims. This often precludes the need for taking the matter to court, as the insurance company handles the compensation payouts directly, simplifying the process and avoiding litigation.

Expat Workers in the UAE

In the UAE, most construction workers are expatriates. The general points of UAE Labor Law are actually the same for all employees working in the UAE, whether they are UAE nationals or expatriates. So, the companies have all those obligations including accommodation, timely wage payments, working time in summer, etc.

However, the challenge is that expatriates may not be familiar with local safety regulations. That is why it is especially important for construction companies to have a health and safety department that conducts educational sessions for new workers to ensure they understand and comply with these safety instructions.

Another concern is the hiring process itself. All workers must pass medical tests and obtain work permits to be employed legally. Here's a step-by-step list for hiring expatriate construction workers in the UAE:

Hiring Process

Medical test. The employee undergoes a mandatory medical test upon arrival.
Work permit. The Public Relations Officer (PRO) submits the required documents including the employee’s passport to the Ministry of Human Resources & Emiratisation (MoHRE). They are further reviewed by the Ministry of Interior to ensure there are no objections or comments. Once approved, the PRO extracts the work permit from the MoHRE.
Visa. With the work permit, the employee can now have their visa processed and issued.
ID. After obtaining the visa, the employee is issued an Emirates ID which means that the hiring process is complete, and the employee is legally authorized to work in the UAE.

Best Practices

To ensure compliance with the UAE Labor Law and maintain a safe working environment, construction companies are advised to implement several best practices.
Construction companies in the UAE should conduct regular educational lectures to reinforce the importance of health and safety regulations among workers.
Companies must prominently display the company's bylaws, which detail safety violations and penalties, to ensure all employees are consistently aware of these standards.
Routine inspections at work sites must be conducted to verify that health and safety requirements are being met consistently.
Legal Advisor at Al Barakah Holding Company
A seasoned legal expert with extensive experience in corporate, commercial, and intellectual property law. His work spans across multiple jurisdictions, including Libya, Egypt, the UAE, and Oman.
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