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Private sector companies in the UAE have been advised not to wait till the end of the year to convert the employee contracts to fixed-term ones.
The new UAE labour law requires all private sector employers to convert their employees’ unlimited contract to fixed-term contracts.
The government has extended deadline for companies to convert the contract till December 31, 2023, on Monday.
“This is a positive development from the authorities and recognises the difficulty some employers were experiencing in converting their employees onto fixed-term contracts. Although the deadline has been extended to December 31, 2023, we still recommend that clients aim to convert employees onto fixed-term contracts as soon as they are able to do so,” said Luke Tapp, partner Pinsent Masons.
Nicki Wilson, managing director, Genie Recruitment, said the process to switch to a fixed-term contract is quite easy for firms, but takes administrative time.
“It is not a cumbersome process but just a bit of an inconvenience. However, we have had a long time to do all the conversions. I personally did all the contract changes and it perhaps took an hour or so to do all the contracts, but then again we are a small business. I can imagine for businesses with hundreds or even thousands of employees this could be quite a burden,” she added.
Since this is compulsory for businesses, she said it would definitely affect all businesses whether big or small in size.
Wilson pointed out that having fixed-term contracts may make employees think about other options after a duration of employment.
“If you think of a mindset with set times, one may think well after I finish my two years, I will consider other roles. We actually often hear this in motivations from candidates. i.e. ‘My contract is due for renewal so I thought it would be a good idea to look for other options’," she added.
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