Labor law Contracts in Dubai
Under the UAE labour law No. 8 of 1980 (amended), there are two types of employment contracts in UAE. Employers offer two kinds of contracts to employees Limited-term and unlimited term contracts.
Whenever an employer hire an employee a contract is presented to draft the terms and conditions. A contract provides the legal security and protects the rights of both employer and employees.
There are various distinctions between two types contracts includes statutory, gratuity, end of service and termination of employee’s consequences.
It is important to know about what is the difference between limited and unlimited contracts and the purpose of the contract.
Conflicts are the part of every organization and same goes for the employer and employees. Contracts play an important role to resolve conflicts and legal disputes among them.
Limited Term Contracts
What is a limited term contract?
A limited term contract is a fixed term contract and associated with the duration of the UAE residency visa. Normally, limited term contracts ends for 2 to 3 years depending on the location and type of visa. Limited term contracts ends automatically at the end of the term. It can also ends before the term if either employee or employer ends it before the mentioned period of the contract.
On the other hand, a limited term contract can be renewed before its termination by both parties. If both parties are willing to work for mutual interests and renew contract for next period.
What is an Unlimited Contracts?
Unlimited term contracts are open ended and can be terminated at any time as per UAE law.
An unlimited contract seems to be more flexible and user friendly as compared to the limited-term contracts. Unlimited contacts are appropriate for the employees who want to stay for a long period of time and the end of the contract is unknown in advance.