Changing unlimited job contracts to limited in the UAE

The Ministry of Human Resources and Emiratization has announced that the deadline for correcting the current conditions granted to employers, especially regarding the transfer of work contracts concluded and signed between workers and employers, will be extended from indefinite-term employment contracts to fixed-term employment contracts until December 31, 2023.

According to the UAE Labor Law, which came into force on February 2, 2022, the employment contract is concluded for the employee for a specified period, not exceeding three years, and it is permissible, by agreement of the employer and the worker, to be extended or be renewed for a similar period or for a shorter period once.

If the employer and the worker continue to implement the contract after the expiry of its original term without an explicit agreement, the original contract shall be considered extended under the same conditions contained therein.

In the event of an extension or renewal of the contract, the new period or periods shall be considered an extension of the original period and shall be added to it in calculating the employee’s continuous service period.

According to the new decision, the transfer of work contracts concluded and signed between workers and employers in the private sector will be extended from indefinite-term employment contracts to fixed-term employment contracts until December 31, 2023. Therefore, the two parties will have enough time to adjust the conditions of workers and employees during the period until the end of the year 2023.