The United Arab Emirates (UAE) is a hub for international businesses and expatriates seeking job opportunities, with the private sector employing many people. The Ministry of Human Resources and Emiratisation (MoHRE) oversees the issuance of employment contracts, including limited employment contracts. This article sheds light on the dynamics of limited agreements in the UAE, demystifying their legal stipulations and explaining how they work.
Highlights
- Introduction
- Limited Contract in the UAE: An Overview
- Key Aspects of the UAE Labour Law Concerning Limited Contracts
- Employee Obligations
- What Happens Upon the Expiry of the Contract?
- Frequently Asked Questions
- Conclusion
Limited Contract in the UAE: An Overview
As the name suggests, a limited contract in the UAE is an employment agreement with a fixed duration. It’s not a long-term, indefinite agreement but one set for a specific period, as defined by the law. These contracts can’t exceed three years and can be renewed for a similar or shorter period, provided that both parties—the employer and employee—agree to the renewal.
Key Aspects of the UAE Labour Law Concerning Limited Contracts
The UAE Labour Law, specifically the Federal Decree-Law No. (33) of 2021 Regarding the Regulation of Employment Relationship and its Amendments, outlines the rights and obligations of both the employee and employer under a limited contract.
Employee Obligations
The law mandates that employees fulfill their work duties personally, without outsourcing any part of their work to other entities. Suppose the nature of the work gives the employee access to the employer’s clients or confidential business information. In that case, they must abstain from working on any competing project in the same sector for two years after the contract termination. Additionally, the employee must work under the prescribed “normal working hours,” which amount to eight hours per day or 48 hours per week.
Employee Rights
Among the benefits for employees under limited contracts, they are entitled to complete payment on public holidays and the right to annual leaves with full pay. Female employees also receive maternity leave benefits. Furthermore, after a year or more in “continuous service,” full-time foreign employees are eligible for end-of-service benefits. On contract termination, the employer must provide an experience certificate to the employee free of charge.
What Happens Upon the Expiry of the Contract?
When the employment contract expires, several provisions come into play. During the notice period, the employment contract remains valid, and the employee is entitled to their full wage. The notice period can be exempted or reduced if both parties mutually agree and the employee’s rights are not compromised.
Non-compliance with the notice period results in the breaching party paying compensation to the non-breaching party. Furthermore, if the employer terminates the contract, the employee can be absent during the notice period for one working day without pay per week to search for another job.
Frequently Asked Questions
What is the maximum duration of a limited contract in the UAE?
A limited contract in the UAE should not exceed three years.
Are employees under a limited contract eligible for end-of-service benefits?
Full-time foreign employees who have completed a year or more in “continuous service” are eligible for end-of-service benefits.
Can employees work for a competing company immediately after their contract ends?
No, if their work granted them access to the employer’s clients or confidential business information, they are restricted from working in the same sector for two years post-contract termination.
Can an employer refuse to provide an experience certificate upon contract expiry?
No, the employer must provide a certificate of experience without any charges upon contract expiry.
Is the employment contract still valid during the notice period?
Yes, the contract remains valid during the notice period, and the employee is entitled to their full wage.
Conclusion
Understanding the UAE’s limited contract system is crucial for anyone considering working there. The legal framework set by the MoHRE and its online system, Tasheel, ensures that the rights and obligations of employees and employers are protected and enforced.
Employees who encounter issues regarding their contract or employer can file a complaint via MoHRE. The Ministry empowers employees and employers, even providing an unemployment scheme to support employees who have lost their jobs recently financially.
