Employment contracts in the private sector must now be based on a fixed or limited term. EXPAT MEDIA

UAE extends deadline for private sector to change employment contracts

Private sector companies have been given an extended deadline to change their employees’ unlimited-term employment contracts to fixed-term contracts. The new deadline is now December 31 instead of February 2, according to the Ministry of Human Resources and Emiratisation (MoHRE). Companies that fail to meet the deadline will be subject to a fine or penalty. “The decision stems from our belief in enhancing flexibility, competitiveness and ease of business for private sector companies and safeguarding all parties’ rights,” according to MoHRE in a statement. A federal decree has stipulated that employment contracts in the private sector must now be based on a fixed or limited term, subject to renewal and based on what is agreed by both parties. A fixed-term contract or limited term contract is linked to the duration of the UAE residence visa, which means the contract will automatically end when the residence visa expires. Companies in the Abu Dhabi Global Market and Dubai International Financial free zones are exempted from the rule. ICA/Expat Media
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