Difference between working for local employers vs. free zone employers in UAE

free zone vs local employers

Resolving a work dispute can be very confusing in the United Arab Emirates as some might work for local employer while some might work for a free zone.

In UAE every free zone possesses its own employment law and the free zones aren’t governed by UAE Labour Law. Free zones are susceptible to the regulations and rules of free zone concerned authorities and retain their very own employment deals. However, Labour Law can still apply and provisions on employment deal must be in line with the Law.

All free zone workers are sponsored by specific free zone authority rather than by their managers. The free zone authority financing the employees, send them straight to the immigration regulators and never to the Ministry of Labour.

This implies they don’t require Labour division approval. Any conflicts between workers and their managers in free zones would not first be noticed at Ministry of Labour but by specific authority.

Employers are needed to hold a bank guarantee that is needed to secure the workers’ dues and any specific end of service advantages which might be paid on termination of their job contracts.

Labour deals in Free Zones are often limited to 2 years. In the case, if the worker terminates the deal prior to the expiry, and if it’s written in the employment deal about refund of visa or other expenses, then the manager has right to claim such reimbursement.

Such a sum will be determined in accordance with the employee’s position along with the salary. Generally, a manager cannot ask worker to refund visa cost along with other expenses. It’s considered as opposed to Labour Law.

If the free zone authority doesn’t authorize the shift of sponsorship, the free zone authority will cancel the sponsorship of worker and the worker would not be permitted to work with a new company unless a legitimate entry permit and visa are obtained. This might require leaving and re-entering the country.

In free zone, The Manager has right to ask the authority to set a work ban for 1 year thus a job ban is appropriate for that specific authority only. In some other Free Zones generally, a manager could make a recommendation to Free Zone Authority to place a ban on the worker, however it is at the sole decision of Free Zone Authority to place the ban or not based on an investigation involving employee work history and competition analysis.

The nature and extent of the advantages a worker employed in free zone enjoys depend upon the free zone where the worker is employed. However, a worker employed in free zone will, generally, enjoy more employment advantages than if she/he were employed onshore in UAE. A good example of this is that not one of free zone authorities would apply to Ministry of Labour for work bans for employers. This indicates the problem of a work ban doesn’t occur when a worker in any free zone wants to take up job with a different company, no matter whether the organization is onshore in UAE or in the free zone. This offers a free zone worker more flexibility of movements than a worker employed onshore in UAE.