A Complete Guide to UAE Labour Contracts
A Labour Contract UAE is a key legal document that defines the employment relationship between employers and employees. As per the Ministry of Human Resources and Emiratisation (MoHRE), over 6 million+ labour contracts were registered in 2024, reflecting the UAE’s growing workforce. For employers, a Labour Contract UAE ensures legal compliance, proper employee management, and business protection. Whether you are signing a new or renewal contract, understanding a Labour Contract UAE is essential to safeguarding your rights and responsibilities. In this blog, we will guide you through its key aspects and recent legal reforms for company formation in UAE.
What is a Labour Contract in the UAE?
A Labour Contract UAE is a former employer-employee agreement that outlines the terms and conditions of employment, such as job title, duties, salary, working hours, and other entitlements. Once both parties sign, the contract becomes legally binding and must be submitted to the MoHRE (Ministry of Human Resources and Emiratisation). In Dubai and across the UAE, having an employment contract UAE is mandatory for all workers, including domestic staff and skilled labourers. It is an official employment record often required for visa processing and labour card issuance.
A Dubai labour contract must include the full names and contact details of both parties, job title and duties, salary and allowances, work location, working hours and weekly rest day, leave entitlements (annual, sick, maternity), end-of-service benefits, and the notice period with termination rules. It’s important to review the contract carefully to ensure all agreed terms are clearly written.
Types of Employment Contracts in UAE
In the UAE, there are two central job contracts: limited and unlimited. These differ in legal duties, protections for workers, and termination options.
UAE Fixed-Term Employment Contracts (Limited)
Fixed contracts are for set periods, often for specific projects. They have start and end dates. As per UAE Labour Law, all employees must now have fixed-term contracts, lasting up to three years.
UAE Flexible Contracts (Unlimited)
Unlimited contracts don’t have end dates. They end only by agreement. Employees must give 30 days’ notice to leave, and employers also need to give notice unless the worker breaks rules or commits serious violations.
Checking Your Contract Against the Offer Letter
Before signing, compare your contract of employment UAE with the initial job offer or offer letter provided. This ensures you receive all promised benefits such as:
- Salary structure
- Annual leave and public holidays
- Health insurance
- Accommodation or transportation allowances
Discrepancies should be immediately discussed with your employer and rectified before submission to MoHRE.
Rules for Temporary Contracts in UAE
In the UAE, there are three main types of labor contracts. Here's a list.
- Full-time contracts mean the employee works 48 hours a week, usually 8 hours a day for 6 days.
- Part-time contracts involve one employer, but the employee works less than 48 hours weekly.
- Temporary contracts are short-term agreements, usually lasting up to 90 days. They are often used as a trial period to explain the rights and duties of both the employer and the employee.
After this temporary period, the contract may be changed to part-time or full-time. Employees with part-time contracts are allowed to take on other part-time jobs without asking their main employer. But if someone wants to work part-time for more than one employer, they must get permission from the MOHRE.
Guidelines of Probation and Notice Period in Employment Contract
In Labour Contract UAE, there are several important guidelines related to employment contracts that both employers and employees should follow.
Probation Period and Notice Rules
Employers can set a 6-month probationary period. Termination requires a 14-day notice. Employees leaving the UAE give 14-day notice; if joining another UAE company, they must give 30-day notice.
Flexible Work Contracts
Employees can choose flexible hours, and employers may assign varied weekly schedules. Workload and overtime laws still apply, ensuring fair treatment despite changing work hours yearly.
Non-Compete Clauses
Employers may add non-compete clauses. Part-time workers can't join competitor companies. Multiple job holders must get approval from MoHRE before working for other employers in the UAE.
Weekly Rest Day
Each employee gets one rest day weekly. Friday is optional. If they work on their rest day, they must get overtime pay or another day off as compensation.
Salary and Currency Payments
Salaries can be in any currency. However, if paid through the Wages Protection System (WPS), they must be in UAE Dirhams. Other currencies are automatically converted.
Annual Leave Rules
During the first six months, employees earn 2 leave days monthly. After one year, they get 30 days of paid leave annually. Unused leave may be encashed.
Maternity Leave
Maternity leave includes 45 days of full pay and 15 days of half pay. In case of complications, employees get an extra 30 days of fully paid leave from their employer.
Compassionate Leave
When a close family member dies, employees get 3 to 5 paid days off. This allows time to manage grief and attend to necessary family arrangements or services.
Study Leave
Employees with two years of service can get up to 10 days of unpaid leave to attend exams or educational activities at a UAE-approved institution.
Contract Termination Rules
Employers can end fixed-term contracts for valid reasons like misconduct or termination. They must also give advance notice:
- Less than 5 years of service: At least 30 days' notice
- 5 to 10 years of service: At least 60 days' notice
- More than 10 years of service: At least 90 days' notice
If an employee is accused of misconduct, the employer can suspend them for up to 30 days with half pay while investigating. The employee gets full pay for the suspension period if found not guilty. Final payments must be made within 14 days after termination.
Exceptions to UAE Labor Law
The new labor contract laws in the UAE generally apply to most sectors, but exceptions exist. For example, the Dubai International Financial Centre (DIFC) has its own set of labor rules that differ from the general ones. The same applies to the Abu Dhabi Global Market (ADGM), which also follows separate labor laws. These areas have their regulations regarding labor rights, which differ from those used in other industries.
What is MOHRE?
The Ministry of Human Resources and Emiratisation (MOHRE), also known as the Ministry of Labour, is a government organization in the UAE. It focuses on managing and improving employment and workforce-related matters. This includes:
- Overseeing the relationship between employers and workers
- Supporting the development of the workforce
- Promoting best practices in human resources Offering essential services
MOHRE supports both employers and employees in the UAE by offering key services like download UAE labour contract online, manpower license in UAE while ensuring fair and ethical working conditions.
Conclusion
A Labour Contract UAE is essential for both employers and employees. It clearly explains the job rules, salary, leave, and other work conditions. With the new UAE Labour Laws, everyone must now have a fixed-term contract, and there are clear rules for notice periods, probation, and different types of leave.
Before signing a contract, always check that it matches the job offer and that everything is clear. Also, remember that some areas, like DIFC, follow different labour laws. If you need help with your Labour Contract or want to ensure everything is correct and legal, we are here to guide you. To know more about business setup in UAE, Contact Dhanguard.
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