The Employment Contract in UAE

You will probably hear many people complain that the employment contract is not worth the paper it’s written on. Certainly there are people who’ve had an unpleasant job experience somewhere where things did not seem to go according to what they understood from their contract.

Labour regulations in the UAE are governed by the UAE Labour Law – Federal Law No. 8 of 1980.

  • Amendments include Federal Laws No. 24 of 1981, No. 15 of 1985 and No. 12 of 1986.

We, Zayed Bin Sultan Al Nahyan, President of the United Arab Emirates; After perusal of the provisions of the provisional Constitution; and Law No. 1 of 1972 regarding the competence of Ministries, powers of Ministers and Laws bringing amendments thereto; and in accordance with the proposal of the Minister of Labour and Social Affairs; the approval of the Council of Minsters and the Federal National Council as ratified by the Federal Supreme Council, decree as follows…

Here is the first part of the law.

UAE Labour Law 2012 download

When working in a Dubai-based company, it is important to familiarize with all Labour Laws and recent changes. In particular, employees who wish to resign must understand the contract termination law (beginning with Article 113) before they plan to leave the job.

It is important to hand in a notice in advance while also taking note to when the period of employment is finished, as specified in the contract. At the time of signing the contract, both parties will have agreed (in writing) as to the employees’ cessation, which is often clearly stated in the work agreement, so the employee is not obliged to work longer than the notice period. The employer cannot request the employee to work longer than the period mentioned in the agreement. Any attempt by the employer to deny the employee their resignation can lead to a labor complaint at the UAE Ministry of Labour.

Those on a limited/unlimited contract could face a penalty to pay for leaving early, so it is important that the worker knows which one will apply. If the worker, instead, is arbitrarily dismissed, the employer may be obliged to pay compensation to the worker, as per the UAE Ministry of Labour’s UAE Labour Law applicable as of June 2 2015, Article 123.

Regardless of the motive and reason for termination of the contract, the employer and the worker may terminate the employment contract at any time after its conclusion, as per Article 117, with proper notification (at least thirty days) and respecting the following notice periods: one week should the worker have worked for a period of at least six months and one year at most; two weeks should the worker have worked for a period of more than a year; or else, one month should the worker have worked for a period of five years or more.

With regard to end-of-service gratuity pay (Article 132), the Worker’s UAE Ministry of Labour states that, on conclusion of that employee’s employment contract, a worker that has spent one year or more in continuous service shall be entitled to an end of service gratuity upon the termination of his or her service. “The labour law states that the standard gratuity is 21 days for each year worked, but if someone resigns having worked for less than three years this is reduced by two-thirds, per Article 137 of Labour Law, so the entitlement reduces to seven days per year, or partial year on the basic salary only.” (Source: The National)

Every employee must learn about the UAE Labour Law prior to seeking employment, as it governs most aspects of employer/employee relations, including termination rights. One of the provisions that it is most important to note is that a non-national employee might be restricted from working for another company in the UAE for a period of time (from six months to a year) following termination.

In particular “should the non-national worker leave work without a valid cause prior to the end of the contract with definite term, he may not get another employment even with the permission of the employer for a year from the date of abandonment of the work (Article 128); if the non-national worker, instead is in an unlimited agreement and after notifying the employer decides to leave work prior to the prescribed notice period, he or she will not be able to get another job in the UAE even with the permission of the employer, for one year from the date of abandonment of the work (Article 129).

The UAE Employment Contract – Learn Your Rights

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