New UAE Employment Law: Firms told not to delay converting unlimited contracts to fixed-term ones

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


Waheed Abbas

Published: Tue 31 Jan 2023, 11:46 AM

Last updated: Tue 31 Jan 2023, 2:15 PM

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.

Is it an easy process?

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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