The changing face of UAE employment laws with Emily Aryeetey of Stephenson Harwood LLP

One of the key attractions for many employees is the lack of income tax at the moment. So understanding what other benefits within the kind of remuneration structure there are in addition to basic salary.

You're listening to the Global Workforce podcast with me, George Britton.

Each week, we interview an industry expert to dive deeper into the world of managing a global workforce and discuss the big strategic challenges that you're going to encounter along the way. This episode is brought to you by Omnipresent, the global employment platform that allows you to employ anyone, anywhere without having to set up an entity.

Designed, built, and supported by global employment experts, Omnipresent takes care of your international employees and contractors so you don't have to worry about payroll, HR, or compliance issues making it easier, faster, and safer to expand internationally.

My guest today is Emily Areetey.

Emily is a senior employment lawyer who plays a central role in Stevenson and Harvard's Middle East employment team. With over ten years of international experience, she advises employers across the entire employment life cycle, including recruitment, termination, data protection, and corporate transactions, as well as the employment aspects of corporate transactions, mergers, acquisitions, outsourcing, and IPOs.

Emily regularly advises on and manages multi jurisdictional employment matters throughout the Middle East and Africa and beyond. For example, in recent years, she's advised on matters in Saudi Arabia, Oman, Bahrain, Iraq, Nigeria, South Africa, Kenya, Ivory Coast, Algeria, and I'm sure many other countries as well.

Emily is widely regarded as one of the leading employment practitioners in the Middle East region and is ranked by Chambers and Partners Global twenty twenty four UAE as an up and coming partner for employment and next generation partner within the legal five hundred EMEA twenty twenty four guide UAE. Emily, I'm really excited to have you on the podcast to talk about all things UAE today.

I'm excited to be on. Thanks for having me.

Fantastic.

So, Emily, you're one of Stevenson Harwood's resident experts in the UAE, but before that, you've trained in the UK. Can you share a few insights about what makes EOE unique as an employment market? What do companies growing their workforce in this region need to know?

Yes. That's right. I trained and qualified in in the UK, practiced there for about seven years before I came to to the UAE. And, that move is is still, a, it's it's it's still in my mind, some of the key things that jump out at you when you when you do move over.

I would say that as a specialist in the UK and having that experience, it's been really useful to draw upon some of that to fill, or rather deal with some of the gaps that you might feel you you encounter here in the UAE, when you're trying to provide kind of practical employment law advice, and commercial advice, particularly to companies that have been headquartered or used to, operating in regions where there's a much more established employment law or or practices.

And then and kind of with that, I would flag that, you know, as as coming to the Middle East, it really struck me just how much personal and professional, connections are are given high importance.

And and I think that really gives it a really dynamic, relationship driven environment or place to do business and and, very attractive for kind of entrepreneurial individuals and companies. And and there's no surprise that, it continues to be a a fairly attractive place, for employees who want to, to work here.

And on that, I think the market does have some unique aspects to it.

The number one is is the legal framework.

You've got multiple jurisdictions at play in the UAE.

You've got federal labor law, which I suppose governs most private sector employment at a federal level.

But then you've also got these commercial free zone areas.

And within those free zone areas, there is there are two, free zone areas which are dedicated financial free zone areas. So one's called the Dubai International Financial Centre, the DIFC, and then you have the Abu Dhabi Global Market in Abu Dhabi, or known as ADGM.

And each of these locations have their own employment regulations.

So businesses moving here need to be clear on, first of all, where is your business going to be based, and which of those rules apply to to your business and your employees. And that's gonna be fundamental so that you get your documentation, work payment permits, visas, and so on correct, when you're trying to get those in place.

And I think on that same vein, speaking of visas, work permits, visas are pretty essential in the UAE. That's not to say you don't need to deal with immigration, in other jurisdictions, but in the UAE, you've got such a large proportion of the workforce of the private sector is expatriate.

And so what you'll find is the is the visa process is pretty integral to employment onboarding and recruitment, and something that is crucial to build into your recruitment, time scales.

And that itself then leads into or lends itself to pretty diverse workforce here. You know, I come from London, and that's obviously a a clearly metropolitan, center. But I think the diversity of the workforce in UAE is is is pretty distinctive, and it it does draw talent from across the world.

And and that diversity is is a huge asset, but it's also something that companies and HR, need to manage, in terms of ensuring you've got kind of sensitivity, built into how you manage those multicultural teams.

And and aligned with that is is also understanding the local policy here around amortization, which is a policy that's aimed at promoting the hiring and participation in the workforce of local UAE nationals, so citizens in the private sector, and understanding that companies will have quotas and and incentives, to to ensure that they're meeting those policies and and rules and and and actually quite essential for for local compliance if you're operating here.

And just kind of the wrap around that is, you know, I I think I would I would emphasize a kind of understanding of cultural considerations here, particularly understanding how Islamic traditions and local customs do shape work life, whether in some locations that may be dress codes, but also in terms of understanding, and observing, religious holidays and and other observances like the holy month of Ramadan, and and just understanding that, how these, these elements all have to be taken into account to maintain a, you know, a compliance, but also a respectful and and inclusive workplace if you're going to be operating here.

Yeah. It makes a lot of sense. I think you've there's so many different topics you've just kind of started to to touch on there. There's so much we we can unpack here.

As you know, I I've actually been doing my first proper trip to Dubai not long ago, a couple of couple of months ago, and I think I saw firsthand some of the things you mentioned there. It's so multicultural over there. There's so many different expats and people from different countries, and I think you can, that then Yeah. Has you know, you need to have that, as you mentioned, like, that that unique piece about work permits is so is so different there compared to lots of other countries in the world.

Right?

Absolutely. Absolutely.

I think it's worth mentioning as well that the UAE is just one component of a much wider Middle East market. So I guess as a follow-up to my first question, how do you find the UAE differs from some of the regional neighbors? Is there any trends or characteristics that jump out at you?

Yeah. I mean, I think there are certainly, similarities, culturally, but also there are some fairly unique factors that make the UAE stand out in the region.

I I think as a as a kind of central theme, I I touched on it just now, is the movement towards, enforcing greater workforce nationalization, across certainly, you know, certainly across the the the countries of the GCC, the Gulf Cooperation Council, which is this policy to to integrate, in a more, systematic way, local nationals into the private sector.

And and that's certainly something that you you see right from whether it's UAE, Saudi, Bahrain, Qatar.

There have been increasing initiatives, in this vein in in recent months and and years.

That being said, there are some differences, and I think economic difference is is one and the diversification in in the UAE.

I think that's probably the big one. I think, you know, the UAE has probably led the way in in moving beyond oil and gas as, as a sector focus, and and focusing heavily on some some other areas like tourism, clearly, financial, tech, particularly in cities like Dubai and Abu Dhabi.

And, you know, other countries in the region are are certainly diversifying, like Saudi Arabia and Qatar, but I think the UAE is probably some way ahead still in having established itself as a real global business and tourism hub.

And and, yes, the other other locations are are growing on the tourism front, but I think Dubai is still some way ahead in terms of that scale, and the appeal.

Bring it back to employment, I think the labor market difference is also quite notable.

You know, I've talked about nationalization, workforce nationalization, and whilst you've got these measures, there's still quite a big expatriate workforce, particularly in the UAE, and I think much more so than in other GCC countries.

So, you know, I think the UAE probably more so than the others continues to attract a very international talent pool, and I think that's that stands stands out.

On the regulatory side, you've kind of got, the UAE is having this business friendly reputation. I talked about free zones. You've got this network extensive network of free zones offering attractive incentive for, foreign investors.

And, again, yes, you you you know, there are financial free to free zones, particularly in Qatar and and Saudi Arabia.

But I think I think the UAE has, yeah, forty five to fifty, and that kind of flexibility is probably keeping it as a top choice for for international businesses.

And that's probably also impacted by the the infrastructure here. So if you've ever visited well, you visited Dubai. So if you've you've been to Dubai International Airport, it's, you know, it's a world class airport.

Abu Dhabi also has a world class airport, has world class ports, and and well established road networks. And I think that probably helps to make it a a major, global hub, because of the connectivity that is that is supporting, businesses here.

And just on a social front, in in terms of the cultural, transparency or openness, I think the UAE's got a fairly open environment, especially in Dubai.

You know, it's known for its extravagances and the vibrant lifestyle, entertainment scene.

And and it's probably known as being a bit more liberal, shall we say, to some neighbors.

Other countries in the region are probably becoming more liberal and and gradually opening up, but I think the the UAE is really, some some way down the line, on that front.

And and that's that's probably helped to, you know, attract employees and and tourists, of course, to make it such a major destination on both fronts.

Yeah. It's it's really interesting because, I mean, from an outsider's perspective, it seems like that region, certainly in the UAE and Dubai in particular, has grown so much over the last couple of decades, predominantly driven by a lot of, a lot of a lot of, expats coming to the coming to the space, but highly skilled workers to help develop the economy. And it seems like that's been a real focus for them. It's really interesting then to see how that's impacted, like you say, the culture and, and and that sort of things, but also how the now there's now this focus on, amortization and, like, and and that focus on migration as well seems really interesting.

Yeah. I think particularly since since COVID, I think the pandemic has really, in some ways accelerated movements, out to to the UAE, people being more open to, to working in the Middle East.

And and, obviously, the the proliferation of different modes of work and and remote working, we've definitely seen, an influx of of of people to the region and Dubai and the UAE more generally in particular.

Yeah. Makes sense. I wanted to pick your brains now on some of the differences in or variations in employment law in in different regions. Obviously, you've advised on, multi jurisdictional matters throughout Middle East, Africa, lots of different countries that I named at the start.

What complex these arise when people are managing employment issues across such diverse legal landscapes?

Well, it I mean, it can be ridiculously complex because, you know, if you're looking from Middle East to Africa, you've just got a sheer diversity in legal, cultural, regulatory landscape. So, it's it's an ask to to be able to manage all of that without some help.

You know, all of the the legal frameworks all differ significantly.

Each country is going to have its own labor laws, and it's important to know how to stay compliant, and and understand the varied regulations in each place. And, obviously, if you're a company that doesn't have that expertise in house in each of those locations, then it's crucial to partner with local experts who, can check the rules, know the rules, whether that's around working hours, termination benefits, onboarding, absences, and and typically, they they will vary pretty widely.

You know, I just talked about, the workforce nationalization policies in the GCC. That's something you need to be aware of.

And even though that's a a kind of common theme, within the GCC, each of those countries will have their own rules, which differ, and it's important to to understand them to to avoid any compliance issues.

And and I and I suppose related to that, I think the main issues, that tend to to come up when we are doing cross border or international, work in in the region is is understanding the differences in termination arrangements, what's allowed, what's not, what can be settled, or even understanding how dispute resolution processes operate so that you can have a really clear strategy when you're planning or handling a termination, particularly if there is a, you know, fixed time scale as a business, perhaps they they need to pivot and and move somewhere else or, you know, there's a rationalization of the business, locally that you need to spend time to make sure that you can fit that all in, and and understanding the payments that become due locally just to minimize any risk of, any, legal, liabilities that could arise by not paying the right things.

I think when you're managing, employment across such a big area, dual employment is something that's particularly tricky.

And this often happens when you've got employees who are working across borders.

So for example, you've got someone living in one country, working there, but they're also employed by a company, a subsidiary in another.

And potentially, you can create tax risks, social security issues, and just, you know, labor law immigration compliance in both locations depending on the particular arrangement you've got in place.

And so we you know, we're we're conscious about advising companies to take care, around, having employees employed in two locations and making sure that you've properly and clearly defined their obligations and entitlements or or at least understand them, as they apply to to both or more countries.

And I mentioned so I mentioned tax there, and I I I would typically try to avoid talking about tax where I can.

But something that often comes up is this this this issue around permanent establishment risk, when you've got cross border scenarios. So if an employee's activities in another country is enough to create a taxable presence, that you're then potentially creating tax obligations in another country.

Now there's much more to it than that, but, it's just an issue for companies to be aware of, and it and it does come up when you're looking at at operating across, the region, and just to be conscious of if you are going to post employees from one place to another.

Yeah. It makes total sense. That sounds like a line you've delivered before, Emily. The tactical presence.

Well worn. Yeah.

Absolutely.

So, yeah, you mentioned kind of, like, all those different jurisdictions, all these different labels, all these different implications.

Let's kind of double click on the on the UAE for a second. I know you've done a lot of training for, HR professionals in the Middle East. What are some of the biggest learning curves that you see for HR people who need to kind of get to grips with the UAE as a as an employment market from scratch?

Well, I guess it would probably mirror my own, kind of knowledge. We do deliver a lot of training for for HR, and we always focus on, at the beginning, understanding that legal framework that I talked about earlier, the kind of mainland versus free zone arrangement.

I think it's important for HR professionals to first be aware of whether or where their organization is, and understanding which law applies.

So is it UAE federal labor law, or is it going to be a specific regulation for one of the free zones or both? Is it if it's a commercial free zone and labor law, and just understanding how the law where their business is operating will impact your employment contracts, terminations, absences, dispute resolution, and just making sure that you don't fall foul of that. It's it's not uncommon to, to have, say, a DIFC, so that's Dubai International Financial Center client, bring us their contracts, and, actually, it's littered with references to the federal labor law, which is completely irrelevant and and and not appropriate. So that's always the kind of focus point as a as a starter for, an HR practitioner looking to, manage employees in the region or in in the UAE.

Then, I mean, I suppose we've talked about cultural sensitivity and that diversity management. So, again, we we often talk about, the the business environment, but also understanding, you know, Islamic traditions and customs and culture, and just understanding as an HR professional that you'll need to be, you know, aligned or or alive to, the need to foster a work environment that dance respects cultural sensitivities, differences, and understanding local customs, holidays, and traditions, like like Ramadan and and working patterns that that come into force during that time.

I suppose employment benefits are another, is another area that HR needs to, get a firm understanding of.

You know, the UAE's got is quite competitive, and and, obviously, one of the one of the key attractions for many employees is the lack of, income tax at the moment. So, understanding what other benefits within the kind of remuneration structure, there are, in addition to basic salary. So, and, of course, some of those are statutory, so they're mandated by law. So understanding, for example, that you need to provide health insurance, a a minimum level of private health insurance.

And then there are kind of market based, benefits that you might offer and understanding what is what is common, and what's going to to retain your employees. So things like housing allowance and, education benefits for employees' children.

And, of course, with such a a predominant, expat workforce, flights home at least once a year is is pretty well, it's considered pretty necessary for for retention unless it's made up in some other way. So I think getting getting to grips with that.

It'd be remiss of me to talk about benefits without talking about end of service gratuity, which is a statutory entitlement paid to employees on termination, if they're eligible, except in the DIFC. So it's the Dubai International Financial Center where you've got this, slightly different arrangement, which is called due. So it's an employee in employee workplace savings scheme.

But HR teams generally need to be prepared to understand how to calculate the benefits, under these different schemes or how to operate them, what the administrative requirements are going to be, and and just kind of, I suppose, payroll requirements more generally.

So you also have, in most of the UAE, so excluding the DIFC, excluding the ADGM, those those common law, the financial free zones, but under the, let's call it mainland or onshore areas.

And in some of the free zone areas, you've also got what we call the wage protection system, which is a kind of digital, transfer system to ensure timely salary payments are made and making sure that employers are paying what they they have, contracted to pay their employees.

I mean, that's they're probably the main things. I think, you know, in in recent years, the UAE has been pretty active, in updating labor laws. There's a lot that's that's going on, that's been changing. So, yeah, it's a challenge for HR everywhere to to to keep up to date with employment laws, and that that is no different, here in the UAE. You've got to really be prepared to keep up to date. And as I alluded to, I think a bit earlier on about kind of being able to draw on my experience in the UK to kind of fill in some lacunas. There are some gray areas in in the UAE, and so you need to be be prepared to understand, you know, what's gone before, what's coming up, what's changing, and just understanding, okay, there's black letter, and there's also how things are done, whether that's before the courts or dealing with the the HR ministry.

But there were just, I mean, there were just an array of changes to the the local regime that that HR will need to keep track of. So, you know, in recent years, we've seen changes to anti discrimination legislation and equal pay initiatives, improvements in terms of family friendly rights, maternity, parental leave, policies, changes to dispute resolution procedures.

There's so much more.

And also immigration and visa requirements are constantly changing, almost day to day. And so I think HR really needs to understand how integral that visa residency system is is to, employing people here and and understanding how that changes and and really how that impacts not only onboarding, but termination.

And and sometimes employers can come a cropper because they don't quite understand what is expected of them and what the timescales are, whether it's canceling visas, or making other changes on that theme.

Mhmm.

It's that's super interesting. So it sounds like what we're saying here is, like, this this is a really attractive market to employ and for various different reasons.

But don't fall into the trap of thinking it's really simple because, actually, by my by my kind of count here, it's actually need to be aware of three different almost like so almost like completely different areas in different employment sets of employment laws. And, actually, because you've got the federal laws, you've got the DFC, and you've got the ADGM. Yep. And it interesting on Friday evening, very timely, one of my clients was asking me, do people typically offer different benefits to people in the ADGM versus the DFC?

I thought that was a really good good question. You say I'm speaking to you on Monday morning.

But, I won't be on the spot for that one, but, what are the key differences that people need to be aware of between the DIFC and the ADGM and and the federal laws? And, like, do they ever it sounded like they conflict sometimes. Right? And sometimes you have them. But you said that you have these employment contracts where actually they're talking about federal law, but doesn't apply to the ADGM region and probably vice versa. So what's your perspective on that? How can that influence strategies?

You're right.

There are some fairly significant differences, and and it's it's it's interesting because you're, things are constantly changing. And I, on the, you know, just on the same, vein, somebody was asking me on, on Friday about the limitation period. So how long do employees have to bring claims? And and this is in the in the, mainland or federal law.

And until very recently, it was one year. It's just changed. It's it doubled to two years. So that's just an indication of how things can change fairly significantly, and are constantly evolving.

But, yes, some fairly key differences between the legal systems, and and and particularly between labor law, and DIFC and ADGM.

Yes, DIFC and ADGM are kind of cousins because they're both, they operate under a common law system, which is, which will be familiar for in terms of principles for for for those who, come from common law jurisdictions, as distinct from the UAE federal labor law, which is based on civil law, and Islamic principles in some respects.

Both DIFC and ADGM have their independent court systems and their own employment laws.

I would say they're largely expire inspired by English law. So so anyone like me with an English or UK legal background, will recognize some language and principles that are pretty similar to the UK's Employment Rights Act and the Equality Act.

And I think that difference fundamentally affects how we approach employment law, matters here.

In terms of my work, I've you know, we've, as a team, focused on advising companies on compliance with the IFC or ADGM law, representing them in the courts. And that's been familiar from the outset because it it fairly follows fairly familiar procedural standards as, as in English courts. They allow for oral evidence.

Case management practices are fairly similar in in terms of, disclosing documents, and laws around, without prejudice conversations and communications.

So that environment can feel quite predictable and a bit more transparent for for certain foreign businesses, and perhaps contrast with quite significantly with the more document heavy, document reliant UAE federal courts where, UAE labor law litigation would be undertaken.

And there you'll you'll have, in some cases, experts appointed by the court to determine certain elements of a case.

And, of course, the main difference is that onshore, like, UAE labor law cases are conducted in Arabic, whereas in the ADGM and DIFC, they're conducted in in English.

And, you know, both the regulatory landscape is evolving in all of those locations continually.

And certainly in the time I've been here, I've seen, you know, three, four changes. The DIFC introduced its new a new employment law in twenty nineteen.

And and then another shift came in twenty twenty where they launched the the DIFC employee workplace savings, scheme dues, and that replaced the end of service gratuity scheme that I talked about before, with this more flexible funded savings scheme. It's a bit more like a a pension scheme that you might be used to in other parts of the world.

And that's that was a fairly significant reform, seen as kind of modernizing the benefit system. The ADGM has recently completed a consultation over the summer twenty twenty four, and that's aligning some of its regulations, more closely with the IFC and and in some respects with the labor law. So we might see that implemented, fairly soon, in twenty twenty four, twenty twenty five.

So, yeah, I mean, I think, like I said, keeping keeping on track with those changes again is pretty essential.

In some ways, both the DIFC and ADGM offer perhaps some higher standards for employees, certainly much clearer provisions on discrimination, data protection, and possibly some of the other family friendly rights.

And I I think we've seen certainly an increase in litigation in in certain areas, more so in DIC and ADGM, perhaps because of the clarity, around things like the enforcement of post termination restrictions and discrimination law.

And and, actually, we've seen recent case well, the first judgment in the DIFC, courts in in October twenty twenty four, which was a case involving Standard Chartered Bank, where the DFC court dealt with allegations of discrimination based on race and nationality.

So, we we are seeing courts more more, ready, to, or I suppose, individuals and companies more ready to, test out the law in in some of these areas.

And and I think perhaps could lead to a rise in in litigation around these areas. So that's why it's important for HR to kind of keep track of all the changes that that are happening both not just in the labor law, but also in a d d ADGM and in the DIFC.

Yeah. Makes makes total sense. So, Emily, how would you kind of characterize the regulatory environment in the UAE at the moment? Would you say there are some pieces of legislation that are, you know, enhancing dispute resolutions for employees? Is this a country that's now becoming more employee friendly?

Do you think that's an accurate summary, or am I being a bit too simplistic?

I think you're right in in in some respects.

I would say the the regulatory environment in terms of employment has seen some shifts to give more protection for employees, particular, changes, focused in the federal labor law. So that applies to mainland UAE, but not to the common law free zones, DIFC or ADGM.

So in particular, I have in mind that there have been some notable changes aimed at supporting employees' ability to enforce their rights.

As I mentioned, that, you know, that recent change from the summer of twenty twenty four, which has extended the time limit for filing labor claims to to from one year to two years.

And then we've also seen an increase in penalties for noncompliance.

And and just again, that simplification, I suppose speed of justice. So the the HR ministry, is now able to issue decisions on some smaller claims. So anything that's up to a value of fifty thousand dirhams.

So you're seeing a streamlining of that dispute resolution, just making it a bit more easier for employees to to bring, their cases to bear.

So, yes, I think that does suggest an employee friendly environment, but I would always argue that there's a trade off. And there has been a historic sense that the UAE is more employee friendly when it comes to employment. But I I actually think, particularly in terms of the the UAE labor law, which was quite significantly overhauled in, twenty twenty two, that some of those adjustments actually significantly eroded, quite key protections around termination of employment for for certain employees, which means that, actually, employers have much more flexibility to to terminate employees, and has probably introduced quite a bit of ambiguity and and and possibly weakened security for employees.

In some respects, I shouldn't I shouldn't be, flagging that so much because then employees won't need us so much. But it it it's it's interesting to see that kind of, sense persist of the UAE being employee friendly. I do think there had been some changes to move the UAE to more balanced, employee friendly, but also maintaining some flexibility and and a competitive environment for for employers to operate in. So it actually a dual focus.

Yeah. It's really interesting because I like, there's so much going on here right there. There's the growth of the market. There's the there's the focus on, amortization.

There's the work permit pieces that's also ongoing here. There's the cultural shifts. As you say, like, there's and then all of these these changes can be really significant, like, the employment lobbying overhaul in twenty twenty two. That's really two years ago. Yeah. It's really, really interesting to see all these all these different all these different aspects of of, like, what we do colliding in in this one place seems really, really interesting.

One other area I wanted to pick your brains on was the alternative EOSB scheme. Mhmm. I think that's another important development that's, showing how countries seem to be tightening or enhancing their rules around pensions and end of service benefits. Could you talk a bit more about that?

Yes. Of course. So the ES EOSB, I should get that right, is the end of service benefit or, it may be called EOSG, end of service gratuity or gratuity.

Basically, it's a statutory payment, that's paid to employees in the UAE and actually, common in the wider Gulf Middle East region.

It's a statutory payment paid at the end of employment, as a form of severance.

Some might consider it a kind of retirement contribution benefit, and that's paid calculated based on final salary, final basic salary, length of service.

And so it's quite different to a traditional pension where you have contributions made and invested over time.

But, yes, as you said, there have been some interesting, developments around alternatives to that. So I mentioned in the DIFC that you have the employee workplace savings plan or scheme, which replaced the end of service benefit in the DIFC in twenty twenty.

And that plan is mandatory for DIFC companies and employees.

And that's a contribution based alternative to, to gratuity, or e ESOB, and that's specifically for DIFC employers.

So we've dues employers contribute regularly to a professionally managed fund throughout an employee's tenure.

Now outside DIFC, you still have the maturity scheme or, EOSB.

And in addition to that, there is now an optional alternative scheme in the UAE, outside of the IFC and ADGM.

And that allows employers to provide and secure retirement savings in a very similar way to to dues.

So, that is an additional scheme. So it's as the, as the title indicates, it's it's an optional alternative end of service benefit scheme.

So it's not mandatory yet.

I'm speculating about the yet, but the firm pretty firm expectation is that this will eventually be, rolled out on a federal level just to ensure a more sustainable, and secure retirement savings. We've seen so much litigation and, disputes around payment of end of service gratuity, the statutory payment, and there have been some changes to how it's calculated and the entitlement over the years.

For example, it would previously, it it could be reduced if the employee resigned, over a period of time.

It could be, it could be, there could be a disentitlement to the benefit if the employee was terminated for, for misconduct for for certain misconduct. So, so kind of over time removing some of the uncertainty because the whole point of it is to provide some kind of independent savings and and secure savings. So that's why there's a fairly clear expectation that it will eventually be rolled out at a federal level. So for HR professionals and employers looking to move into the region, even those that are here, it's definitely an area of really keen interest, as those new schemes become available.

And, there are a plethora of of, potential providers who will be looking to get their scheme on the market. So, eventually, as an HR manager or director, you'll eventually need to be thinking about how best to offer those benefits, which scheme, best meets your business's long term financial goals, how to roll out that strategy.

There'll be an an employee, education piece around that, potentially also some contractual arrangements or amendments to be made. So, yeah, the the UAE is kind of exploring modernizing, savings and and employee benefits in that way. So quite a significant shift we're seeing just in terms of helping employees with financial planning, and financial, retirement benefits.

Yeah. That is really interesting to see that see that evolving. Yeah. I know we're kind of committed to time. I just wanted there's a few more questions I wanted to pick your brains on. A bit earlier on, you talked a bit about data protection laws in the context of those different, there's different, subregions or sub, subregions within the UAE. I was curious to get your take on how, these issues were evolving in the Middle East and, in particular, in the in the UAE.

Yeah. I think, data protection and privacy have become big topics in the Middle East, particularly in the last five five to six years.

And, obviously, my focus is on the employment side to helping companies to set up practices that meet any local requirements and international standards, in terms of their employment arrangements.

And, I mean, data protection laws have been around for a while in in various guises.

In the DIFC, where where where we're based, data protection legislation has been around for for many years, but it was really strengthened with the updated law in twenty twenty.

And that law kind of built on the existing framework and added in some global standards, obviously, drawing upon, the GDPR, and introducing some key aspects around data subject rights, clarification around lawful processing, and when you have the grounds to process and and, how to manage data transfers to other jurisdictions.

So, really, when that came in, we've been helping employers update employment contracts, draft employee privacy, statements, and developing employment data protection policies.

We also get involved in, data subject access requests or DSARs, which is when employees want to see what personal data their employers hold on them.

It's not something I've really seen a lot of in the region, but I think it's it's increasing now as as greater awareness is made of, data protection laws, particularly when there are disputes or performance reviews, and and and employees have become more aware of their rights.

The ADGM also has, a dedicated data protection a general data protection law, which again, aligns with international lawn norms. And the UAE also introduced a federal data protection law. However, to the frustration of of some, we are still waiting for specific regulations, and we're expecting a a data protection office to be established, which would handle enforcement and and queries.

So a little bit of uncertainty, but nevertheless, companies are still preparing for compliance regardless of kind of anything that needs to be completed on on that front. And a lot of my clients have, have international partners or they have global operations. So they're looking already to, you know, perhaps to GDPR or other global international frameworks as as kind of their gold standard. And so, you know, following those principles to manage cross border processing, actually helps build trust not only with their business partners, but also employees. So, you know, it does come up in in various areas here. We've been asked recently to, you know, advise on retention schedules, and, actually, the DIFC law, for example, does dictate certain, retention periods for certain employment records. So HR teams do do still need to have an understanding of data protection, in the region.

And I think overall, just the the region is is moving towards more global data protection standards. I know Saudi Arabia has has introduced fairly, stringent requirements, and companies will be needing to put kind of fairly solid, perhaps GDPR type aligned policies in place, and it's it's certainly to be, an area to be focused on, as these new regulations kind of continue to be rolled out in the region.

Yeah. That's that's really interesting. It's good. It's just to see that, like, there's that hopefully, we'll get to a a world at some point in the future where everything becomes, like, there's a standard. There's a global standard that everyone kind of points to and agrees to, but, yeah, it's it's interesting to see that things are evolving quite rapidly over there.

Definitely.

There's a couple final questions I just wanted to to get your perspective on.

We talked a bit earlier on about, cross border transact or cross border, employment laws. I wanted to get your take on, m and a transactions in particular, and and when companies are going through a merger acquisitions in the UAE, what are some of the key things that they need to be thinking about when they go through those, transitions to make sure that this is as smooth and as simple as possible for for them and for their employees?

It's a good question, actually. And I was as you were saying, I was thinking, oh, there's when we talked about what do HR need to know, obviously, we usually, first usually, your first thought is to the onboarding. So how do we get, get people on the ground? But, actually, you also need to think about what happens when you're you're acquiring, businesses and employees. And, one of the key differences moving from for me, certainly, moving from the UK was understanding in the context of an m and a deal, that there's no automatic transfer principle.

So you don't automatically get employees moving from one entity to the new entity on their existing terms as you might be familiar with in in the UK and and in the EU more generally.

And actually here when you're, if you're buying a a a business, transferring employees actually requires their current contracts to be terminated.

So that includes settling final payments, end of service benefits, and then you need to rehire them, under new contracts with the acquiring company. So that actually means managing the arrangement of new work permits and new visas, and that's all going to take time. So it's it's just another element of, planning, when it comes to, acquiring another business. So something that you need to plan ahead, and a key, area.

And and in particular, that piece around the end of service benefit and how how to pay that out because since your employment is technically terminated, the end of service benefit becomes due at that point. So you crystallize that right. So in in m and a situations, there's always a conversation or typically is a conversation about how we deal with that.

Do you decide to pay it out at, at completion, or is there some arrangement, some negotiation, discuss discussion around carrying it forward under the new employment arrangement and and there being a promise that the, you know, the acquiring company pays that out at some point in the future.

And that's just something that needs to be agreed upfront, in in my opinion, just to ensure a a pretty smooth or a smooth, a tradition, as you can have.

I think in terms of the due diligence in, deals here, it's pretty similar to what you would do globally.

I'd say in the UAE, cross border or or dual employment issues do come up quite a bit.

And I think it's quite common to see that employees might have employment rights in multiple jurisdictions. So as I mentioned before, if they've been seconded or they're a dual contract, and that can be something that can be quite complex to manage. So it does tend to get flushed out during, acquisitions, and it's something that needs to be addressed at that point to avoid future complications and and to settle any any arrangements.

So, yeah, I think just the there are some some, some particular, tweaks to the process that you would usually follow in a in a acquisition somewhere else when you're dealing with, employees here in the UAE.

Yeah. Makes sense. So not only so I guess if you're going through one of these situations right now, not only do you have basically three different jurisdictions of, ADGM, DIFC, and and the and the federal law to to accommodate. You gotta get up to speed with all of those things at once.

You also have a lack of, a transfer an automated transfer process. So that's something you need to navigate as well as for an extra cherry on the top, you've also gotta figure out the work permit situation to to make sure you can get those quickly and ensure a smooth transition. So so it sounds like a really simple task for somebody who's going through that, yeah, at the moment. Right?

That's it.

Perfect. Emmy, this has been so insightful for me. I've learned loads today. I'd to to myself, you've enlightened me on some of the some of the areas I hadn't even factored into, that are kind of creating this real hub of excitement and change and all the different things that that that are going on here.

Before we close out, I just wanted to get from you, what would your top tips be for a company building their workforce in the UAE for the first time right now?

So this might come across as a bit of a plug, but, I think your your first thing is to make sure you're consulting with local experts.

I mean, that's not necessarily legal professionals. It could be HR consultants, immigration advisers.

You need people to make sure you have the help to navigate the complexities of what we've just been discussing, whether it's the labor laws, employment laws, regulations, the visa situation, onboarding, and just getting the right advice is is important for getting compliant and and having that sustainable practices in place.

Just be flexible.

We've just barely scratched the surface. I think the UAE is really evolving quickly in this market in terms of employment developments.

And every week, there is something different and and new.

One thing we we were talking about over the summer is how, the UAE have developed this kind of work in UAE platform, which is meant to be a one stop shop for employee onboarding.

And it's just kind of a focus on well, it just brings to into focus how important it is to be able to streamline the hiring process, because you are managing expatriates and and having to, manage documentation, whether it's getting the visas and therefore having to, get your employees professional qualifications and education certificates and, and and making sure the documentation is in one place. So, I think being being adaptable and, being able to, navigate a a quickly evolving landscape is is important. And, of course, I have to say, I think partnering with an employer of record can be a smart move on that.

So, again, a a plug for you guys, but, you know, if you if people don't have a local HR, presence, and not familiar with the local landscape, then having, someone who can kinda take a lot of that compliance and the logistical details and having that kind of streamlined onboarding process is is just going to be, a no brainer just to allow you to focus on, you know, growing your business. And and then as time, you know, moves on and you you you get familiar with the with the landscape, you've got time to then understand and and manage some of that yourself.

I couldn't agree more. Yeah. But to underpin, I think your your your first point was really sound. It seems like, you know, people will often overlook how complex this this country is, and it's almost like three different countries in one in in certain ways.

And so That's it.

Yeah. Definitely speak regardless of your employment model, like, definitely worth speaking to an expert before you go jumping in with both feet.

Emily, thank you so much for being on the Vowel workforce podcast day. It's been an absolute pleasure, and I've learned a huge amount. And I'll look forward to seeing you again soon.

Likewise. Thank you for having me on.

Cheers.

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