What Is a Limited Contract in Uae

If the termination is provided for in a fixed-term contract, it must be made available to the other party in addition to an early termination fee due. Find out how our work and incentive practices provide legal assistance for fixed-term and open-ended contracts in the UAE. In 2018, the Ministry of Human Resources and Emiratization (MoHRE) introduced a new rule that allows companies to recruit professionals at home or abroad under a multi-employer contract (part-time contract). This type of contract is limited only to skilled workers, i.e. holders of a university degree or higher and those who have obtained a two- or three-year degree in a technical or scientific field. Following recent reforms of the UAE`s labour market, fixed-term contracts have a maximum duration of 2 years, compared to 4 years previously. The contract must also include a termination. Summary dismissal by the employer is permitted on the basis of one of the 11 exhaustive grounds provided for in Articles 88 and 120 of the United Arab Emirates Labour Code. An employee may effectively terminate the contract in accordance with Article 121 of the Act before the expiry of the contract. Under the United Arab Emirates Labour Code No. 8 of 1980 (as amended) (the “UAE Labour Code”), which applies to all employers in the United Arab Emirates (with the exception of those established at the Dubai International Financial Centre (“DIFC”), there are two types of employment contracts that employers can issue to employees; fixed-term or open-ended contracts.

A contract of indefinite duration is permanent and may be terminated for various reasons under the United Arab Emirates Labour Code (see answer to questions 13 and 14 below). These contracts are accepted when an employer needs to hire employees for certain projects or a certain duration. A fixed-term contract usually expires within the period specified in the contract, unless it is renewed by the employer by mutual agreement with the employee. On the other hand, a contract of indefinite duration is of indefinite duration and can be terminated either by the employee or by the employer, provided that there is a notice period of 30 days. This is how we integrate our guide to a fixed-term contract in the United Arab Emirates. The work processes in the country are quite smooth, thanks to MOHRE and its Tasheel online system. If you have problems with your employment contract or your employer`s conduct, you can always file a complaint with MOHRE. The organization strives to empower employees and employers in the UAE. Unless otherwise provided in the employment contract, if the employee wishes to terminate the fixed-term contract before the end of the period, the UAE Labour Code requires the employee to pay the employer an “early termination indemnity” equal to half of the three months` remuneration, including salary and allowances, or half the remuneration for the remaining period if the contract lasts less than three months. According to the Federal Industrial Relations Regulation and Amendment Act No. 8 of 1980 (“United Arab Emirates Labour Law”), employment contracts may be of two types of “fixed-term contracts” and “contracts of indefinite duration”.

As the name suggests, fixed-term contracts are set for a certain duration, while open-ended contracts are of indefinite duration and do not specify or terminate a duration. A fixed-term contract may not exceed two years and must indicate the period of notice from at least one month to a maximum of three months. Fixed-term contracts generally do not have a notice period and simply expire at the end of the term or on the date specified in the contract (unless they terminate them earlier by one of the parties – see answers to questions 5 and 6 below). If an employee withdraws from a permanent contract, he is entitled to a tip at the end of the service on the following sliding scale: Those who are new to Dubai should note that the Ministry of Human Resources and Emiratization (MOHRE) issues two types of employment contracts for those who work in private sector companies: limited and unlimited. Here you will find a comprehensive overview of fixed-term contracts in the UAE and the legal provisions and claims under this type of employment contract. The part-time contract can only be converted into a regular contract at the end of the part-time employment contract. Open-ended contracts are generally considered to be more flexible and user-friendly than fixed-term contracts. For this reason, a contract of indefinite duration is more commonly used in the United Arab Emirates than a contract of limited duration. It can be used for employees who are supposed to be permanent and do not do project work (if the duration of the project is known in advance). According to Article 113 of the Water Labor Code, an employment contract can be terminated in the following three cases: There are some differences between fixed-term and open-ended contracts in the UAE. An employer can terminate an employment contract without notice and withdraw the employee`s remuneration at the end of the service period if this: A permanent contract is of indefinite duration, more flexible and is often used in the UNITED Arab Emirates.

It can be terminated by mutual agreement or with 1 to 3 months` notice. The parties concerned must comply with their obligations throughout the notice period. Under the part-time contract, the original employer supports: Termination of the contract by the employer After the termination of the employment contract and the cancellation of the work visa, the dismissed employee benefits from a grace period of 30 days from the date of termination, during which he can either obtain a new residence permit, or leave the country. Illegal residents can be fined or evicted. Each party may terminate the original contract or a contract renewed individually, provided that it respects the legal consequences of early termination, including: Fixed-term contracts are useful when an employer needs to hire employees for certain projects and the duration of these projects is known in advance. The employee or employer may terminate a contract if it has been mutually agreed by both parties, provided that they comply with the specified notice period for the duration specified in the contract (no more than three months). In addition, an employer may immediately dismiss an employee who has a fixed-term contract without setting a notice period if one of the grounds for dismissal referred to in clause 120 of the UAE Labour Code occurs. Article 120 of the Water Labor Code gives the following ten reasons: According to the UAE Labor Code, a fixed-term employment contract must specify at least the following elements: a fixed-term contract may be mutually terminated at the choice of the employer or employee in accordance with the aforementioned provisions of Article 113; or, in accordance with article 116, where a worker terminates a contract for reasons other than those referred to in article 121, the worker must compensate the employer for the damage he suffers as a result. This amount of compensation does not exceed half a month`s salary for 3 months or for the remaining duration of the contract, whichever is shorter, unless otherwise specified in the contract. Know the different types of private sector employment contracts in the UAE.

Choosing the right type of contract at the beginning of each employment relationship is important to mitigate the risk. Do you know the types of contracts available and the main differences? On the other hand, in addition to the reason stated in Article 113 of the UAE Labor Code, as stated above, a worker can legally terminate a fixed-term employment contract if: According to the UAE Labor Code No. 8 of 1980, there are two types of employment contracts: fixed-term or (fixed-term) contract and contract of indefinite duration. The difference lies in the provisions relating to tips and termination at the end of service. In 2018, the UAE introduced the part-time contract system based on a ministerial decision. A fixed-term contract is a fixed-term contract and usually depends on the duration of the UAE residency visa (i.e. two or three years, depending on the employer`s location). It terminates automatically at the end of the term, unless it is terminated earlier by one of the parties or renewed by both parties.

According to Article 120 of the UAE Labour Code, the employer may dismiss an employee under a fixed-term contract without notice in the following circumstances: In general, fixed-term contracts indicate the start and end dates of the period of employment. If the contract is not renewed, it will be terminated automatically upon expiration. The part-time contract is subject to the same rules and penalties that apply to regular employment contracts usual in the United Arab Emirates: limited or unlimited. In accordance with Article 117 of the United Arab Emirates Labour Code, a contract of indefinite duration may be terminated at any time by the employer or employee for a valid reason, provided that the conditions of the notice period are met by the terminating party. A “valid reason” for terminating a contract of indefinite duration should be any “work-related” reason. Work-related reasons may include, but are not limited to, poor job performance, disciplinary violation or employee misconduct, or other reasons. An employee can terminate by giving the employer the contractual notice period (which, according to the employment contract, must be at least 30 calendar days or more). As the name suggests, a fixed-term contract is a type of employment contract valid for a short period. It begins and ends on the dates indicated, unless it is renewed by the employer. In the case of contracts of indefinite duration, an employment relationship is terminated in one of the following cases: A limited contract mentions both the start and end dates of the contract. In a perpetual contract, the start date is the only one mentioned in the contract.