Limited Contract Law in UAE: What You Need to Know
The United Arab Emirates (UAE) has a well-defined legal system that governs the employment contracts between employers and employees. As a foreign national working in the UAE, it is important to understand the legal framework behind limited contracts.
What is a Limited Contract?
A limited contract, also known as a fixed-term contract, is a contract between an employer and an employee that specifies a predetermined duration of employment. Limited contracts are used to cover temporary or project-based roles, where the employee is only required for a specific period of time. In the UAE, the duration of a limited contract cannot exceed four years.
What Are the Benefits of a Limited Contract?
Limited contracts offer several benefits to both employers and employees. For employers, it provides the flexibility to hire employees for a specific period of time without the added expense of long-term benefits and bonuses. On the other hand, limited contracts offer employees job security and a defined end date, which allows them to plan their career and life goals accordingly.
What is the Legal Framework Behind Limited Contracts?
The UAE Labor Law governs the employment contracts between employers and employees and sets out the terms and conditions that apply to various employment scenarios. A limited contract is governed by Article 37 of the UAE Labor Law, which requires employers to issue written employment contracts to their employees.
Under Article 37 of the UAE Labor Law, a limited contract must include specific information, including:
– The name of the employer and employee
– The date of commencement and expiry of the contract
– The nature of the work
– The workplace location
– The remuneration details
– The notice period required to terminate the contract
– Any holiday entitlements
It is essential for both employers and employees to review the terms of the limited contract before signing. Employers must ensure that the terms of the contract are legal and align with the requirements of the UAE Labor Law. Employees should carefully review the terms of the contract and seek legal advice, if required, before signing.
What Happens When a Limited Contract Expires?
Upon expiry of a limited contract, an employee may be offered an extension, or they may be released from their employment. If an employer wishes to offer an extension, they must issue a new limited contract to the employee for a further period of time. Alternatively, the employer may offer a permanent contract to the employee.
In the event that an employer does not renew a limited contract or offer a permanent contract, the contract will expire on the designated date, and the employee`s employment will be terminated automatically.
Limited contracts are an essential part of the employment landscape in the UAE. They offer employers and employees flexibility, job security, and a defined end date. However, it is important to understand the legal framework behind limited contracts and to review the terms of any employment contract carefully before signing. If you have any questions or concerns regarding limited contracts in the UAE, seek legal advice from a qualified professional.