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.
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.
The UAE labour law has various employment contracts, mainly limited and unlimited. Each type caters to different employment needs and has distinct features:
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:
A limited contract is helpful for timeline-based projects. This allows employers to hire staff for specific durations without any commitments.
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:
Unlimited contracts are helpful for employees seeking long-term stability in an organization.
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.
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.
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.
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.
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.
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.
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.
Having a digital copy of your UAE labour contract is crucial for several reasons:
Before entering into any contract in the UAE, it is important to understand the key components of the employment contract:
The contract must clearly state the employee's responsibilities and duties. This helps avoid disputes or disagreements regarding performance and expectations.
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.
The contract needs to mention all the details about the employee’s salary, any bonuses, overtime pay conditions, and other benefits.
The contracts must clearly state the notice period to avoid any confusion. Usually, notice period ranges from 30 to 90 days.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
Employees who have completed at least 1 year of continuous service are eligible for end-of-service gratuity. It is calculated as follows:
Also, days of absence without pay do not count toward calculating gratuity.
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.