Question: I am currently employed at a mainland Dubai company that offers bonuses, annual salary increases, and other benefits. I’ve received a job offer from another company that provides a higher base salary but does not mention any annual salary increases. Can I request that a clause guaranteeing annual salary increases be added to the contract? If so, what is the legal standing of such a clause under UAE labour law? Please clarify.
Answer: Article 8 of the Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationships along with it amendments and in conjunction with Article 10 (1) of the Cabinet Resolution No. 1 of 2022 on the Implementation of Federal Decree-Law No. 33 of 2021, outlines the mandatory information that must be included in an employment contract:
“The employment contract should include the name and address of the employer, the name, nationality and date of birth of the employee, proof of his identity, his qualification, the job or occupation, the date of work commencement, the workplace, the working hours, the rest days, the probationary period, if any, the term of the contract, the wage agreed upon including the benefits and allowances, the annual leave entitlements, the notice period, the procedures for terminating the employment contract and any other data determined by the Ministry in order to regulate the relationship between both parties.”
Furthermore, an employer and an employee may agree to include additional terms in the standard employment contract, as long as such terms do not conflict with the provisions of the Employment Law, any resolution, or any applicable legal regulations.
This is under Article 10 (2) of the Cabinet Resolution No. 1 of 2022, which states: “The employee and the employer may agree to introduce new clauses to the approved contract forms, provided that they are in agreement with the provisions of the Decree-Law, this Resolution and the Legal Regulations.”
The Employment Law provides the minimum rights to which an employee is entitled. However, if an employee is entitled to better benefits under another law, a company policy, or their employment contract, such rights will still apply. An employer should not reduce or take away more favourable benefits just because they are not stipulated in the Employment Law. This is in accordance with Article 65(1) of the Employment Law,
“The rights stipulated herein shall represent the minimum rights for workers and the provisions hereof shall not prejudice any of the rights granted to the worker under any other legislation, agreement, acknowledgement, regulation or employment contract, which would grant the worker rights that are more useful than the rights established under the provisions hereof.”
Generally, in the UAE, an employment contract may not include the annual salary increment of an employee as an employer is not able to determine and evaluate the work performance and other aspects of an employee’s work, at the time of making an offer to an employee.
However, you may discuss with your prospective employer to add the clause pertaining to annual salary increments. If your prospective employer agrees to include a clause guaranteeing annual salary increments in the employment contract, it will be legally binding and enforceable. While the Employment Law does not require employers to provide annual salary increases, it allows employers and employees to mutually agree on additional benefits.
