The deadline for employers in the UAE to change employment contracts in accordance with the new labor law is approaching, as employers must comply by 1 February 2023.
The government changed the rules for fixed-term employment contracts in the private sector last year. Previously, the law stated that these contracts couldn’t last longer than 3 years.
However, the new amendment removed the 3-year limit, allowing employment contracts to have a defined term, with no maximum limit set. If both employer and employee agree, the contract can be renewed.
According to the Ministry of Human Resources and Emiratization (MoHRE), this change will protect both parties, grow the labor market, and make the UAE economically competitive. Firms and employees will be able to easily agree on part-time work, job-sharing, and project-based tasks as a result of this amendment.
The law, however, doesn’t apply to employers in Abu Dhabi Global Market and Dubai International Financial free zones, and domestic workers employed by families are also exempt.
Also, companies, failing to revise contracts, will face penalties. However, authorities have not disclosed the fine or punishment that will be imposed.