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What you should know about UAE employment contract changes

What you should know about UAE employment contract changes

 The Ministry of Human Resources and Emiratisation of the United Arab Emirates (UAE) has said that amendment to fixed-term employment contracts is mandatory for all private sector companies in the country, and it must be completed by the February 1 deadline.

In October 2022, Abdulrahman Al Awar, the Minister of Human Resources and Emiratisation, said, “The UAE government continues to develop regulations and laws that align with what the next 50 years of UAE’s development demand.” 

Last year, the UAE implemented changes to employment contracts. Under the amendments, the UAE authorities said that private sector employees’ permanent or indefinite contracts must be replaced with renewable three-year contracts. However, the UAE government removed the planned three-year limit on fixed-term employment contracts. 

As per new laws, private sector companies must issue new contracts to cover a defined term of employment. Now, there will no longer be a limit on the length of the contract that covers employment. However, private-sector employers and employees must agree on the duration of the contract.

All private-sector employers must obtain the new contracts by February 1. The Ministry of Human Resources and Emiratisation would fine companies if they fail to meet the deadline. It is compulsory for private sector employees to obtain a new contract.

Employees working for companies in the financial-free zones of Abu Dhabi Global Market and Dubai International Financial Centre are exempted from signing the new contracts. 

The cost to transfer to fixed-term employment contracts must be paid by the employer. Employees must not pay to obtain the new contract.

According to the Ministry of Human Resources and Emiratisation, the amendment aims to protect employees and employers. It also aims to enhance the labor market’s growth and stability. 

The amendment and new contracts would not affect the day-to-day responsibilities of employees and employers. 


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