All private sector businesses in the UAE must switch to fixed-term employment contracts by the deadline of February 1st, based on the Ministry of Human Resources and Emiratisation. In October of last year, the UAE government eliminated the three-year cap on the duration of fixed-term contracts in the private sector as part of changes to the nation’s labor regulations.
The second-largest economy in the Arab world, the UAE, has recently implemented several economic, legal, and social measures to enhance its business environment and draw in more foreign direct investment. It also wants to entice competent workers with new visas and provide financial incentives for companies to start up or increase their operations in the UAE. In addition to a robust rebound from the coronavirus-induced downturn, the UAE labor market has also benefited from the government’s fiscal and monetary policies.
Minister of Human Resources and Emiratisation Abdulrahman Al Awar said last October, when the modification was announced that the UAE government continues to update rules and legislation in line with what the next 50 years of UAE’s growth need. The rules and regulations promote the stability of our business environment and enhance its resilience and allure.
Here is everything you should know about the revisions to employment contracts in the UAE’s private sector.
What modifications have been made to UAE employment contracts?
In February of the previous year, the UAE government updated the country’s labor rules with new legislation. Under the modifications, permanent or indefinite contracts for private sector workers will be substituted with renewable three-year agreements. The government adopted Federal Decree-Law No. 14 of 2022 in October, eliminating the three-year cap on fixed-term work contracts. The Ministry of Human Resources and Emiratisation said that private sector enterprises are now obliged to issue employment contracts with a fixed period that may be extended “subject to the consent of both parties to a contractual relationship.” However, the period of the contract would no longer be limited. It also implies that the term of the contract must be agreed upon by both the employer and employee.
“The rules adhere to the UAE’s sophisticated framework and its foundational and guiding values based on justice, respect for human rights, and adaptability. Mr. Al Awar said at the time that this ensures the UAE’s sustained growth, stability, and status as a pioneering nation.
What is the timeline for the completion of the new contracts?
By February 1st, all private industry employers must have adopted the new contracts. The Ministry of Human Resources and Emiratisation may impose a fee on businesses that fail to meet the deadline. It is currently unknown what the punishment will be.
Is it required that all UAE workers sign a new contract?
Yes, the new contract must be signed by employees in the private sector. Domestic workers and employees of businesses operating in Abu Dhabi Global Market and Dubai International Financial Center’s financial free zones are not included, nevertheless.
Will workers be required to pay for the new contracts?
No, the company covers the cost of moving new employment contracts; employees are not responsible for this.
Will this impact my career?
No, it will not affect your daily obligations. The Ministry of Human Resources and Emiratisation said it would enable private-sector employers and workers to negotiate part-time employment, job sharing, and other duties.
In addition, the amendment seeks to safeguard all parties in a manner that promotes the development and stability of the labour market and strengthens the UAE’s economic competitiveness. “The new amendments build a sophisticated ecosystem of mechanisms that enhance the ease of business, productivity, and resiliency of the labour market while increasing its appeal to company owners and talent,” stated Mr Al Awar.
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UAE, one of the most admired cities in the world, has the youngest and most skilled workforce. Human resources in the UAE are abundant. Our incredible team of specialists will connect you with the staff. There are a number of advantages to obtaining the appropriate workforce supply from us: Our clients receive the very best. Our primary objective is to provide superior services. The adaptability of our service offerings is an added benefit for our customers.
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