So you have received a tempting job offer huh?
Well, congratulations!!! But before rushing to sign the contract, it is important to carefully review the details of the employment contract.
Employment contracts in the UAE differ depending on the type of work and the terms agreed upon by both employer and employee. These agreements can outline various arrangements, such as full-time, part-time, temporary, flexible, remote work, or even job sharing.
Once the contract is signed, any changes to the offer letter’s terms must have the employee’s consent and align with UAE labour laws. Taking the time to review everything thoroughly can help you avoid complications later.
Landing your first job in the UAE is an exciting achievement, but signing an employment contract requires careful attention to detail. The UAE Labour Law (Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations) governs private-sector employment, promoting transparency and fairness for both parties. Here’s a guide to help you understand the essentials before putting pen to paper.
Understanding Employment Contracts in the UAE
Under the UAE Labour Law, employment contracts are legal agreements that define the terms and conditions of your job. These contracts are binding for both you and your employer.
Key Requirement: According to Article 9 of the UAE Labour Law, every employee must have a written employment contract.
Receiving a Job Offer
When you’re offered a job in the UAE, the process involves receiving a formal job offer, signing the employment contract, and obtaining your work permit and residency visa. The job offer outlines your role and includes an annexe summarising key provisions of UAE labour law. Both you and your employer must sign these documents to proceed.
Once signed by both parties, the offer letter legally becomes your employment contract. As per the labour rules introduced in 2016, employers cannot change the terms of the offer letter unless you agree to the changes, the adjustments comply with UAE labour laws, and your rights remain protected.
Signing the Contract
Before signing, your employer must ensure that you’ve read and understood the offer letter. If it’s found that you didn’t review the annexes properly before signing, the employer could face a fine of AED 20,000 for submitting incorrect details to the Ministry of Human Resources and Emiratisation (Mohre).
If you’re already in the UAE, you’ll need to sign the offer letter before your employer can get preliminary approval for your employment from Mohre. Once the offer is signed, a copy is submitted to Mohre and stored in their system. Your work permit will then be issued based on the details provided in the offer letter.
Types of Employment Contracts in the UAE
The UAE Labour Law defines two types of employment contracts, each with distinct features:
1. Limited Contract
- Has a fixed term, usually up to three years, renewable upon mutual agreement.
- Ideal for project-based or temporary roles.
2. Unlimited Contract
- Does not have a specific end date.
- Offers more flexibility for resignation or termination.
Key Reference: Article 8 of the UAE Labour Law outlines the details of both contract types.
Guidelines for Employment Contracts
From February 2022, all employment contracts must follow a fixed-term structure of no more than three years, renewable upon mutual consent.
Essential Details in the Contract
Your contract should include:
- Job title and description
- Work location
- Contract duration
- Start date
- Salary and benefits
💡 Tip
Ensure your job title and responsibilities clearly align with your understanding of the role. This can help prevent misunderstandings or disputes down the line.
Understanding Your Salary and Benefits
The UAE Labour Law mandates that your employment contract clearly outlines your salary structure, including:
- Basic Salary: The agreed-upon base pay.
- Allowances: Any additional amounts for housing, transportation, or other needs.
- Additional Benefits: Bonuses, commissions, or other incentives.
- Annual flight tickets
- Medical insurance
- End-of-service gratuity
Ensure these perks are explicitly mentioned in your contract to avoid confusion later.
💡 Tip: Confirm whether your salary payments will be made monthly or follow a different schedule to ensure clarity.
Working Hours and Overtime
Under the UAE Labour Law, standard working hours are 8 hours per day or 48 hours per week, with reduced hours during Ramadan. These hours may vary for specific industries or categories of workers.
Working hours: Confirm your working hours comply with UAE labour law. According to the law, the normal working hours for the private sector is eight hours per day, or 48 hours per week. This may be increased or decreased for certain economic sectors or certain categories of workers.
Home-to-office commutes are not included in the working hours, except for “certain categories of workers”.
If an employee works for more than one employer, he/she may not be required to work more than the hours agreed upon in the employment contract, unless the worker agrees to do so in writing.
If the worker requests to perform work remotely, and it is granted, the employer must stipulate specific working hours.
An employee is entitled to break(s) in between working hours (if required, in intervals) which may not be less than one hour in aggregate. Further, an employee may not work for more than five consecutive hours in a day without a break.
Overtime work: Employees can be asked to work overtime, provided the number of extra hours do not exceed two in a day.
If an employee is required to work beyond the normal hours, the pay for the extra time is hourly wage (basic) plus 25 per cent of that amount. This could increase to 50 per cent if overtime is done between 10pm and 4am. This rule does not apply to employees who work in shifts.
4. Probation Period
Employers in the UAE can place new employees on a probation period of up to 6 months. During this time, either party can terminate the contract with notice. Once the probation period is over, the termination process becomes more structured as per Article 43.
Understand the duration and conditions of the probation period. UAE law limits it to six months, after which either party must provide a valid reason for termination. When you complete the probation period and continue in service, the probation will be calculated as part of your service.
Probation Period Guidelines
Employers can place you on probation for up to six months, during which they can terminate the contract with 14 days’ notice. After completing probation, termination requires a notice period of at least 30 days.
Key reference: Article 9(4).
Legal Obligations of Employers and Employees
The UAE Labour Law protects both employers and employees:
Employer Obligations:
Provide a signed copy of the employment contract.
Ensure a safe and professional work environment (Article 13).
Employee Obligations:
Perform duties with diligence and abide by workplace policies.
Maintain confidentiality as required by the job.
What to Do If You Spot Discrepancies
If you find inconsistencies in your contract:
Clarify with HR: Request written clarification on ambiguous clauses.
Seek Legal Advice: Consult a legal expert familiar with UAE Labour Law.
Contact MOHRE: You can raise concerns with the Ministry of Human Resources and Emiratisation (MOHRE).
5. Annual Leave Entitlements
Employees are entitled to annual leave after completing six months of service:
- 30 days per year for those with one year of service.
- Pro-rata leave for those with less than a year.
Ensure your contract specifies leave entitlements and the process for requesting time off.
Review annual leave entitlements, sick leave, maternity/paternity leave, and provisions for public holidays.
Employees are entitled to a fully paid annual leave of:
30 days, if they have completed one year of service and
Two days per month, if they have completed six months of service, but not one year.
According to the law, the employer may not prevent the employee from using their accrued annual leave for more than two years. On termination of employment, any accrued leaves will be calculated on basic salary only.
Part-time employees are entitled to annual leave according to the actual working hours they spent at work, as specified in the employment contract.
6. End-of-Service Gratuity
Under Article 51, employees who complete at least one year of service are eligible for end-of-service gratuity. This is calculated based on your basic salary and years of service:
- 21 days’ basic salary for each year of the first five years.
- 30 days’ basic salary for each additional year.
Check your eligibility for gratuity payments, which are based on your length of service, and whether the contract includes provisions for additional retirement or pension schemes.
7. Visa and Employment Sponsorship
Your employer is responsible for processing your employment visa and work permit. These costs cannot be passed on to you, as per Article 60 of the UAE Labour Law.
Relocation costs (if applicable)
If you are moving to the UAE for a new job, make sure the contract outlines relocation assistance, flight allowances, or repatriation benefits upon termination.
8. What to Watch Out for Before Signing
Before signing, ensure the contract reflects all verbal agreements made during your interview. Key areas to verify include:
Job title and scope
Job title and description
An employment contract in the UAE is an agreement between you and your employer. It outlines your job responsibilities and management structure in exchange for the agreed salary or benefits provided by the employer.
Ensure that your job title and description align with what was promised during the recruitment process. This impacts your role’s scope, career progression, and visa classification.
This contract is based on the job offer letter that both you and your employer sign. The employer must submit the signed contract to the Mohre within 14 days of your arrival in the UAE (using an employment entry permit) or after your visa status changes if you are already in the country and eligible to transfer.
Salary and benefits
Working hours
Notice period and termination clauses
Ensure the notice period for termination aligns with the law (usually 30 to 90 days) and is fair for both parties.
💡 Tip: Always keep a copy of your signed employment contract for reference.
9. Legal Protections and Dispute Resolution
If disputes arise, you can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE). The UAE Labour Law provides mechanisms to resolve conflicts fairly, emphasizing the importance of adhering to the signed contract.
Final Thoughts
Signing your first job contract in the UAE is a pivotal step in your career journey. By understanding your rights under the UAE Labour Law and reviewing your contract thoroughly, you can start your professional life with confidence.
Are you about to sign your first job contract? Share your questions or experiences in the comments below—we’d love to hear from you!
Have you recently signed your first UAE job contract? Share your experience or questions in the comments below!
