Types of Employment Contracts in UAE
Types of Employment Contracts in UAE
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Types of Employment Contracts in UAE
Posted on June 13 2024
Types of Employment Contracts in UAE

Different types of companies, different types of work, and different lengths of employment in the UAE have different types of employment contracts. If you want to work in the UAE, you'll need a contract. To put it simply, they are an integral aspect of HR. Having a thorough understanding of employment contracts is crucial for human resources professionals.

Employment Contracts in UAE?

In the United Arab Emirates, employment contracts are essential. The agreement lays out the parameters under which the business and its workers will operate. They specify the employee's responsibilities, the length of time they will be working, and the amount of money they will be paid.

Additionally, the paper serves as evidence that the individual is employed, has a valid reason to remain in the area, and that the company is covering all expenses.

In the United Arab Emirates, it is risky for workers and employers alike to work without a formal contract. Employees risk having their immigration status revoked. Companies risk losing their company licenses and facing fines if they hire workers without proper contracts.

Types of Work agreements most commonly used in the UAE

Employment contracts in the UAE will fall into one of two categories: public or private.

Companies in the private sector are common, and when you work with one, you'll be interacting with a particular company in the private sector. These could be local, national, or even global corporations. Based on your skills and the needs of the organization, you would be negotiating a contract with them directly.

In contrast, governmental entities are known as public-sector organizations. Together with the government agency, you will draft the employment contract.

Differences Between Public and Private Sectors in Terms of Employment

Employment Contracts in the Public Sector

The United Arab Emirates recognizes four distinct forms of employment contracts for public sector organizations. Decision No. 13 of the Cabinet of 2012, Executive Rules for Decree under Law No. 11 of 2008, and Articles 9–16 establish the forms and terms of contracts.

For public-sector companies, there are four different types of employment contracts:

1. Full-time employment contract

2. Part-time employment contract

3. Temporary contract

4. Special Contract

Full-time employment contract 

The employee is employed full-time in the relevant role and receives the whole compensation and benefits as outlined in the full-time employment contract. The employee is required to provide services to the company for the full working days or hours indicated in this contract, just like any other full-term employment agreement.

Part-time employment contract 

Employees are only required to put in a certain number of hours each week or day under a part-time contract. In addition to benefits and allowances, an employee's pay is computed in proportion to the amount of working hours or days. Remember that if the financial allowances for the same role are available, it is possible to transfer the contract from part-time to full-time or vice versa upon the employee's request.

Temporary Contract

The employee is required to work all day, every day for three months as part of this contract. You have the option to renew this contract for the same duration. After the employee's temporary contract ends, they may be appointed to a permanent position that better suits their skills, experience, and credentials. To accomplish this, you must change the kind of contract and incorporate the duration of the temporary contract into the service period.

Special Contract

Appointing an employee with exceptional credentials to a senior position inside the company is the purpose of the unique employment contract. The minister signs a unique contract appointing the worker. The initial term of the agreement is two years, and it is renewable for an additional two years. The Cabinet gives its final approval when the ministry and the ministry of finance collaborate to establish the remuneration parameters.

Private Sector Employment Contracts

Dubai Labor Law No. 8 of 1980 establishes the terms and conditions of work in the private sector. It describes three distinct kinds of contracts for workers.

1. Limited Contract

2. Unlimited Contract

3. Part-Time Contract

Limited Contract

A limited contract, sometimes called a fixed-term contract, specifies the beginning and ending dates of an employee's work. Unless renewed prior to the expiration date, the contract is considered canceled upon expiration. Temporary or project-based staffing is a typical use case for these types of contracts. The first duration of a limited liability company contract is two years, and subsequent renewals are also for two years. A limited-term contract must include the following details in accordance with the UAE Labor Law: the beginning and ending dates of the contract, the amount and kind of compensation, the location of the employment, and the length of the contract.

Unlimited Contract

The conventional employment contract is an example of an unlimited contract, which is more open-ended and flexible than a limited contract. Ending an unlimited employment contract requires both parties to agree and provides a notice period of one to three months, depending on the contract. The employment contract should also include the following details: starting wage, benefits, date of joining, probationary and notice periods, leave cycle, yearly leave, and working hours.

Part-Time Contract

Additionally, it should be noted that a part-time contract was in effect in 2018. This was for those who wanted to work part-time, and it let companies hire qualified people from the UAE and other countries. It is possible for employees with part-time contracts to work several jobs without obtaining permission from either their primary or secondary employer. But first, they need to get permission from the MoHRE. These contracts were last put into effect in 2018, as previously stated.

Can someone have multiple employment contracts?

People usually only have one job contract active at any given moment. But you may wonder if you can find alternative work if your part-time job has limited hours. Fortunately, a new provision of the MoHRE permits contracts in the UAE to include more than one employer.

Time limits for UAE probation and notice

It's worth noting that employment contracts in the UAE typically include probationary periods. It is illegal to keep an employee on probation for more than six months, according to the law. Adding another phrase to it is also not possible. At the end of the probationary term, the employee's time spent on the job will be considered part of their total service.

Employers are also not allowed to unilaterally terminate a probationary employee's employment. The employer must provide written notice fourteen days in advance. On the other hand, a month's written notice is required by the employer. If a person resigns with the goal of leaving the UAE and their employment, they only need to provide 14 days' notice. Assistance in overseeing your employment agreements

As a payroll system, you must manage employment contracts

If you are interested in learning more about the top contract workforce currently available, please contact us now.

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