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CONTRACTS

Contracts

Employment contracts can be quite confusing and difficult to understand with the technical wordings and structure. You may have lost your job or experienced a breach in the contract, and must be in the need of legal advice on what to do about the breach. We can help you with that. We will carefully examine the terms and conditions of your contract and provide the right advice on what action should be taken to claim your right.

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Summary of employment contract law of UAE

Choosing the right type of contract with comfortable conditions is important to ensure a favorable and risk free working environment. There are 2 types of employment contract available in UAE.

Under the UAE labour law No.8 of  1980, which is applicable to all employees in UAE, an employer can issue to types of contracts to employees; limited term and unlimited term contracts.

LIMITED TERM CONTRACTS

A limited term contract is a fixed term contract and is linked to the duration of UAE residency visa, i.e. 2 or 3 years. It will get terminated automatically at the end of the period, unless it was terminated or renewed by both parties. This types of contracts are useful when employer needs workers for specific projects with predetermined length of time.

According to UAE labour law, the contract must, as minimum specify;

  • The date of beginning
  • The date of conclusion
  • Nature of work
  • The work place
  • Duration
  • Remuneration

Limited term contracts gets terminated automatically at the end of term, on the specific date mentioned without prior notice. Dismissal by the employer or resignation by the employee prior to expiry of contract are allowed under the provisions of article 88, 120 and 121.

Early termination by employer: If the employer terminates the contract early, the employee is entitled to early termination compensation including minimum 3 month remuneration, if remaining period is more than 3 months.

Early termination by employee: if the employee wishes to terminate the contract early, he is entitled to pay early termination compensation of half of 3 months remuneration or residual period remaining.

Limited term contract can be renewed or convert in to unlimited term contract with the consent of both parties.

Unlimited term contract

An unlimited term contract is an open-ended contract and can be terminated for various reasons under the UAE labour law. It is more flexible and friendly than limited term contracts and is the most commonly used contract. This is issued for permanent workers who intent to work for a long period.

An unlimited term contact must, as a minimum specify;

  • The date of beginning
  • The date of conclusion
  • The nature of work
  • The work place
  • The remuneration 

Termination

By employer: Under UAE labour law, there are 2 ways for an employer to terminate an unlimited term contract

  1.  For a performance related ‘valid’ reason, on a notice, the notice period normally being 30 calendar days
  2. For one of the 11 exhaustive gross misconduct reasons mentioned in articles 88 and 120 of the UAE labour law

By employee: An employee can terminate the contract by resigning after providing the employer with the contractual notice period, which usually is a minimum of 30 calendar days.

Although it may seem daunting, an extensive and elaborated contract can minimize the potential future disagreements and disputes. So know your rights and limitations before signing in a contract. If you feel unsatisfied or manipulated, contact the employer and if you don’t feel justified, contact us for legal advice and actions.