The United Arab Emirates is the global hub for professionals from all over the world. People from different countries work in the UAE. For smooth and productive working relationships, the UAE Labour Contract is an essential framework for the rights and responsibilities of the employees and the employer. The labor contract helps set clear expectations and understand and provide detailed employment contract terms. Labour contracts help avoid any possible misunderstandings and ensure transparency between the employee and the employer. In this blog, we will understand the UAE labour contract, the different types of contracts, etc.
What is a UAE Labour Contract?
The UAE labour contract is a formal document that lists the terms and conditions of employment. It contains terms of employment, responsibilities of the employee, working hours, monetary compensation, and termination conditions.
These contracts ensure that both the employer and employee know their rights and duties and that they are protected. They also help ensure clarity by providing written proof of terms and conditions. The labour contract must be written in Arabic, with an English translation for non-Arabic speakers.
Types of Labour Contracts
The UAE labour law has various employment contracts, mainly limited and unlimited. Each type caters to different employment needs and has distinct features:
1. Limited Contract (Fixed Term Contract)
Limited contracts, also called fixed-term employment contracts, have a fixed term of employment, usually ranging from 1 to 3 years. Such contracts are mainly used for project-based roles or temporary work.
Key Features:
- Duration: Fixed start and end dates.
- Renewal: Can be renewed with mutual agreement.
- Termination: Terminates automatically at the end of the period unless renewed or terminated early by either party.
A limited contract is helpful for timeline-based projects. This allows employers to hire staff for specific durations without any commitments.
2. Unlimited Employment Contracts
Unlimited employment contracts do not have specific start and end dates. They are well-suited for permanent positions and provide better employee job security.
Key Features:
- Duration: No fixed dates
- Notice Period: A notice period must be served before separating from the company.
- Termination Compensation: According to the situation, the employee may get compensation incase terminated before the contract ends.
Unlimited contracts are helpful for employees seeking long-term stability in an organization.
3. Full-Time Employment Contracts
According to the UAE labour law, employees with full-time contracts need to work upto 48 hours every week. These contracts mostly have 6 days a week with 8 hours everyday.
4. Part-Time Employment Contracts
Employees with part-time contracts can work for less than 48 hours, which helps them focus on work-life balance and take care of any other necessary obligations while having an income.
5. Temporary Employment Contracts
Temporary work contracts are mostly used when an employee is under probation. The duration of probation lasts up to 90 days. After the period is over, a full-time or part-time position is offered to the employee according to their performance.
6. Job Sharing Contracts
Job-sharing contracts let 2 or more employees work on the responsibilities of one full time role. This helps in maintaining the work life balance for employees, while the employer gets the necessary skills required for the job.
Legal Framework Governing UAE Labour Law
The Federal Law No.8 of 1980 established the legal framework of the labour contracts in the UAE. This law has been updated and amended multiple times over the years to keep up with the changes in the labour market. The most significant change came with the Federal Decree-Law No.33 of 2021, which mentioned that all the fixed-term employment contracts should not exceed 3 years.
Key provisions that govern all types of contracts:
- Written Contract: All employment contracts must be documented in writing.
- Language Requirements: The contract must be written in Arabic. The English translations will be available.
- Job Description: The labour contract needs to define the roles, duties, work hours, compensation, etc. clearly.
- End-of-Service Benefits: Employees are eligible for gratuities upon contract termination according to their length of service.
- Probation Period: UAE labour law allows for a probation period of up to 6 months, during which either party can end the contract with minimal notice.
Navigating Employment Contract Online
Due to increased technical advancements, the employees can easily access their employment contract online using official platforms like the Ministry of Human Resources (MOHRE) website or the MOHRE app. MOHRE website and app ease the process of creating, signing, and managing the employment contracts while ensuring compliance with the UAE labour law.
Benefits of managing contracts digitally:
- Accessibility: The official documents can be quickly approved and managed.
- Efficiency: Online documents reduce paperwork.
- Transparency: Help maintain accountability and transperancy between employers and employees.
MOHRE Website and App: Accessing Your Labour Contract Online
The Ministry of Human Resources and Emiratisation (MoHRE) is the government body that regulates the labour market in the UAE. It oversees workforce development, ensuring ethical working conditions and compliance with UAE labour law. The goal of the MoHRE is to promote best practices in human resources while providing essential services to employers and employees.
Importance of Accessing Your Labour Contract Online
Having a digital copy of your UAE labour contract is crucial for several reasons:
- Legal Protection: It is a legally binding agreement outlining your rights and responsibilities.
- Accessibility: You can access your contract anytime, anywhere, as long as you have internet connectivity.
- Dispute Resolution: A clear record of your employment terms helps avoid misunderstandings and disputes with your employer.
Key Components of Labour Contract
Before entering into any contract in the UAE, it is important to understand the key components of the employment contract:
Job Responsibilities
The contract must clearly state the employee's responsibilities and duties. This helps avoid disputes or disagreements regarding performance and expectations.
Working Hours
The contract must state the working hours according to UAE labour laws. The standard work hours should not be more than 48 hours per week unless required and stated by the employer.
Compensation
The contract needs to mention all the details about the employee’s salary, any bonuses, overtime pay conditions, and other benefits.
Notice Period
The contracts must clearly state the notice period to avoid any confusion. Usually, notice period ranges from 30 to 90 days.
End-of-Service Benefits
If an employee resigns or is terminated from their position, they are eligible for the end-of-service benefits according to their duration of service.
What are the Entities Exempt from Labour Contracts?
Even though labour contracts are a necessity for most jobs in the UAE, a few specific categories of workers are exempt from these provisions. Understanding the details of the exemption is important to ensure compliance and avoid any miscommunication. Entities like government workers, domestic workers, Dubai International Financial Centre, and other free zones are exempt from the labour contract.
Challenges with UAE Labour Contracts
Sometimes, the employees and the employers may face multiple challenges with the UAE labour law and contracts that often leads to disputes and misunderstandings. The following are some of the common issues and challenges:
Early Termination Compensation
According to the UAE labour law, if an employee is terminated without any fair reason before the expiry date of a limited contract, they may be liable for early termination compensation.
Non-Compete Restrictions
The labour contracts often have non-compete restrictions that deny employees from working for competitors after leaving their jobs at a company. This may become a hindrance to an employee if they get a good role, but the contract prohibits them.
Changes in Employment Terms
Suppose any party wants to change the existing contract terms, like salary or responsibilities. In that case, it has to be documented legally through an amendment process that is overviewed and agreed upon by all the parties involved.
Frequently Asked Questions about UAE Labour Contracts
What should I include in my labour contract?
The labour contract needs to mention the job title, responsibilities, duration, work hours, compensation, notice period, and any other terms and conditions for the role.
Can I change my employment contract?
Yes, changes can be made to the contract if all the parties agree to change the current contract terms. The changes have to be documented formally through a written notice.
What happens if I want to resign before my contract ends?
If you resign before the contract expiry date, you may have to serve the notice period according to your employment contract or face penalties, depending on the employer's policies regarding early resignation.
Are there penalties for early termination?
Yes, there are penalties for early termination. According to UAE labour law, if the employer terminates the employee's contract for unfair reasons, he may be liable to pay the employee early termination compensation.
How do I obtain my labour card online?
Employees can apply for a copy of their labour card online through the MOHRE Website or MOHRE App by submitting the required documents, such as their passport number and Emirates ID number.
Is job sharing available for full-time positions?
No, the job-sharing model does not apply to full-time employees. It is specifically designed for those who want to work part-time or share their roles with others.
How is the end-of-service gratuity calculated under fixed-term contracts where the employer terminates the contract?
Employees who have completed at least 1 year of continuous service are eligible for end-of-service gratuity. It is calculated as follows:
- For the first 5 years of service: 21 days' pay for each year
- For each additional year over 5 years: 30 days' pay for each year
Also, days of absence without pay do not count toward calculating gratuity.
Conclusion
The UAE labour law has dynamic laws for the protection of both the employees and the employer. Especially in the current job market, it is essential to stay updated with the rights and provisions. Whether an employee is joining a company has a part-time or full-time, understanding the labour contract conditions will help them make informed and safer decisions regarding their career.
Having a clear and well drafted employment contract serves as a legal safeguard and helps avoid any misunderstanding or disputes between the employees and the employers. This ensures that employees are clear with their responsibilities and employers are also protected.
Ensuring compliance with human resource laws can be confusing and overwhelming for organizations. In such cases, using tools like Darwinbox to simplify the human resource process helps companies focus on their business goals while ensuring productive working conditions for the employees. Darwinbox has multiple features for workforce management like employee data management, local laws compliance, work permits tracking, probation periods management, etc.
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