Employment Contracts in UAE

Employment Contracts in UAE

Understanding Employment Contracts in UAE is vital for both employers and employees navigating the professional landscape in this dynamic nation. Employment Contracts in UAE serve as the foundational agreements that outline the terms and conditions of the working relationship. These contracts in UAE provide a framework for rights, responsibilities, and expectations, ensuring a clear understanding between the employer and the employee.

When entering into Employment Contracts in UAE, it’s essential to be aware of the legal requirements and nuances specific to the country’s labor laws. Employment Contracts in UAE typically cover crucial aspects such as job responsibilities, compensation, working hours, and leave policies. Employers use these contracts to define the terms of employment, while employees rely on them for clarity and protection of their rights.

In this exploration of Employment Contracts in UAE, we’ll delve into the key components that both employers and employees should be mindful of. By understanding the intricacies of Employment Contracts in UAE, individuals can make informed decisions and foster a positive and transparent work environment. Let’s unravel the essentials of Employment Contracts in UAE, ensuring a harmonious and compliant employment relationship for all parties involved.

Employment contracts in UAE can be either full-time or part-time, with various work arrangements such as temporary work, flexible work, remote work, or job sharing.

Employment Contracts

Employment Contracts in UAE

Employment Contracts in UAE are as follows:

Fixed-term contracts

As per Federal Decree Law No. 33 of 2021, ‘UAE Labour Law’ (in effect since February 2, 2022), employees can be hired under a fixed-term employment contract. This contract’s duration can be extended or renewed for an equivalent or shorter period.

If the contract expires and isn’t renewed or extended, but both parties continue working as per the contract’s terms, it’s considered renewed with the same conditions as the original agreement.

Any extensions or renewals of the employment contract terms are factored into the calculation of an employee’s end-of-service benefits.

The law also states that unlimited employment contracts can be converted into fixed-term employment contracts under this decree law within one year from the existing contract’s effective date. The Cabinet may extend them further if it’s in the public interest. Additionally, the provisions of this decree law apply to unlimited employment contracts created as per Federal Law No. 8 of 1980.

Probation period

The probation period for employees should not exceed six months and may only be extended for another term if necessary. When the employee successfully completes the probation period and continues working, the time spent in probation will be considered part of their total service.

In case the employer wishes to terminate an employee for any reason during the probation period, a written notice of at least 14 days must be provided.

If an employee on probation decides to change jobs and join a different employer in the UAE, they must give their current employer a written notice of at least one month. In this scenario, the new employer is responsible for compensating the current employer for the recruitment expenses, unless an alternative arrangement has been agreed upon between the current employer and the employee.

However, if an employee resigns during the probation period with the intention of leaving the job and the UAE, a written notice of 14 days is required.

If the resigning employee returns to the UAE within three months with a new work permit, the new employer is obligated to compensate the previous employer for the recruitment costs, unless a different agreement exists between the current employer and the employee.

Like Employment Contracts in UAE, you may also like to read about Workplace Gender Equality.

Non-compete restrictions

Article 10 of the UAE Labour Law allows employers to incorporate non-compete clauses in employment contracts. These restrictions should be reasonably limited to safeguard the legitimate interests of the business and clearly specify the duration, geographical scope, and the type of work involved. The maximum duration for such restrictions is two years from the expiration of the employment contract.

Employment Contracts in UAE

Types of work arrangements

The UAE Labour Law recognizes various models of work arrangements, including:

  1. Full time: In this arrangement, an employee works exclusively for one employer on a full-time basis.

  2. Part time: In a part-time contract, an employee works for one or more employers for a specified number of hours or days.

  3. Temporary work: Temporary work involves specific assignments, and the contract concludes upon their completion.

  4. Flexible working: Working hours or days may vary based on the employer’s business needs under this arrangement.

  5. Remote work: In remote work, all or part of the work is performed outside the traditional workplace.

  6. Job sharing: Job-sharing contracts divide tasks and duties among workers as agreed upon, typically following part-time work regulations.