UAE Scraps 3-year Limit on Private Sector Employment Contracts

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Picture for illustrative purposes only. ARCHIVE

UAE scraps three-year limit on private sector employment contracts

The UAE Government has issued a new directive scrapping the three-year limit on employment contracts in the private sector.

Under the amended UAE labour law, there will no longer be a limit on how long the employment contract can be, however, employment contracts in the private sector must have a defined term.

Indefinite contracts have to be changed to fixed-term contracts that can be renewed. This is in line with the Federal Decree Law ordered by the late Sheikh Khalifa last November.

Under the amended legislation, employment contracts must cover a defined term, agreed on by an employer and employee, but “the law does not set a cap on that period”.

According to the Ministry of Human Resources and Emiratisation, employment contracts can be renewed as long as both the employer and employee agree to the conditions.

The amended law covers employment in the private sector, which includes employees in free zones and mainland companies.

It does not apply to employees in the public sector, domestic workers and employees in the Dubai International Financial Centre and the Abu Dhabi Global Market.

The new amendment is part of an update to the UAE’s labour laws that were first announced in November and enforced starting in February to allow flexible work for employees.

Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said the updated laws “align with what the next 50 years of UAE’s development demand”.

“The amendment aims to protect both parties in a balanced way; [it] advances the labour market’s growth and stability, and enhances the UAE’s economic competitiveness,” the ministry said. ICA/Expat Media

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