An employment contract is an agreement of hiring an employee that an employer extends to an employee on the set conditions. A written agreement between a specific employee, an employer, or a labour union is known as an employment contract. It lays out the obligations and rights of the two parties—the employer and the employee.
It is a simple agreement that covers the working relationship between a company and an employee. With this contract, both parties understand their obligations and the terms of employment that the corporate lawyer from the top law firms in Dubai helps you with the drafting.
Employment Contracts in Dubai, UAE
Requisites of Employment Contracts
Here are the inclusions that an employment contract must have. This will give you a brief idea of what should be followed and added to the agreement between employer and employee.
- The first important thing is to add the salary details. Even if you are hiring an employee on a commission basis, every little detail should be explained coherently.
- The days and hours an employee is expected to work may occasionally be specified in an employment contract.
- The duration of the employee’s commitment to work for the business will be outlined in an employment contract.
- The various responsibilities and obligations that a worker will have while employed can be specified in contracts.
- Even though you might need to sign a separate non-disclosure agreement, some contracts contain a confidentiality clause.
- An employment contract may specify that the employer retains ownership and control of all communications if the employee’s duties include managing social media, websites, or email.
- Another thing that should be added to the employment contract is the benefits the employer will provide to their employee. This may include health insurance details, coverage policy, leaves and vacations, encashment, bonuses, and other perks.
- Only some contracts have it, but many employers want employees to put their signature to that non-competing agreement, or a non-competing clause (NCC) is added with care. Many companies take advice from their legal consultants for adding this clause to the contract. This clarifies that the employee cannot work in the primary role for a competitor company upon leaving the job.
Employment Contracts in Dubai, UAE
Federal Law No. 8 of 1980 regulates the employment law and the documents required in the law. However, several amendments have been presented for it, and still, it provides several labour conditions to be followed by all companies and business owners. Here is everything to know about employment contracts in Dubai, UAE.
New Implementation in the Law
The two- and three-year restrictions on fixed-term employment contracts in the private sector will be lifted according to new directions that the UAE government released in October 2022.
The Ministry of Human Resources and Emiratization (MOHRE) announced modifications to the decree law on the Regulation of Employment Relationships as part of an update to new labour regulations that went into effect in February.
The UAE ministry said employment contracts are essential under the new amendments since they define the term. However, no time is associated with the duration of the employment contracts being made. However, it is essential to note that the employment contract must be fully synchronized with an employee’s visa status, and the employer will administer that.
Types of Employment Contracts in Dubai
While we talk about UAE, there are two types of employment contracts. Here are the two types;
- The limited-term employment contract
- The unlimited-term employment contract
The main distinction between these contracts is the time or duration, which is determined by the fixed term for contracts. However, when a company hires a foreign employee, the company needs to obtain approval from the Ministry of Human Resources and Emiratization.
Based on this approval, the company can sponsor their employees for work visas and work in Dubai or other Emirates of the UAE. Moreover, if any foreign employee has made an employment agreement with a company in a free zone, the free zone authorities will directly sponsor their employee.
i) Limited-Term Employment Contracts
A fixed-term contract with a restricted period is typically correlated with the length of the UAE resident visa. Unless one party terminates it early or both parties agree to a renewal, it will automatically expire at the end of the term. Here are some factors to know about limited-term contracts;
In limited-term contracts, employers will engage the employees for specific projects known in advance.
These contracts have no notice provision and expire at the end of the term or on the date specified in the contract.
The renewal of this contract is done with the consent of both parties.
ii) Unlimited Term Contracts
According to UAE Labor Law, an unlimited-duration contract is unrestricted and may be cancelled for several reasons. Here are some factors to know;
- It is a more flexible term contract.
- It benefits the employees planning to take permanent work status and not just project-based work.
This contract term ends with a valid reason on a notice period of 30 calendar days.
How Can a Professional Lawyer Help You?
An employment contract lawyer is a legal advisor who assists with preparing, examining, or negotiating an employment contract. You may have to sign an employment contract when you accept a new job offer, and although it might only sometimes be required, many businesses demand the agreements.
MAAF Legal, on the best legal consultancy firms in Dubai, brings to you the most professional, qualified, and experienced advocates and lawyers who hold proven expertise in commercial law practices and drafting employment contracts and other documents.
The Final Words
Employment contracts are essential because they define and give the legal details essential for you to notice. You will need legal advisors who will work for you and provide legal solutions for drafting and implementing employment contracts while adhering to the legal bindings.
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