UAE: Ministry issues clarification over employment duration in contracts

The Ministry of Human Resources and Emiratisation (Mohre) in the UAE has issued a clarification regarding the fixed-term contracts between employers and workers.

The new UAE labour law requires all private sector employers to convert their employees’ unlimited contracts to fixed-term contracts. The Ministry has confirmed that it does not specify an exact duration for the employment relationship between the parties, allowing them to negotiate terms that suit their needs.

The government has extended the deadline for companies to convert the contract till December 31, 2023.

Employers must renew the work permit when it expires based on the type of work permit that can be renewed, and there is no need to print a new employment contract if the existing contract is still valid and unchanged.

The new labour law and its executive regulations define 12 types of work permits that regulate the employment of citizens and expatriates in all private sector establishments in the country. Moreover, the updated labour law sets out nine specific scenarios under which an employment contract may be terminated.

These include mutual agreement, the completion of a specified contract period without renewal, termination at the request of either party, and situations involving a worker's death, permanent disability, or imprisonment. Employers will now have clear guidelines on how to handle contract terminations, ensuring fair and legal practices.

In another crucial development, the Ministry addressed concerns about unjust and arbitrary dismissals.

The new regulations firmly state that terminating a worker's service would be considered unjust or arbitrary if it's due to the worker filing a serious complaint to the Ministry or initiating a lawsuit against the employer that is proven to be true.

In such cases, employers are obliged to provide fair compensation to the affected workers, reflecting the type of work, extent of damage, and length of service.

In any case, the compensation amount should not exceed the worker's salary for a period of three months, based on the last salary received.

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