UAE Law and Practice Contributed by: Amir Alkhaja, Gerry Rogers, Daria Selivanova and Danila Kriuchkov, Habib Al Mulla & Partners
Verbal agreements are not valid. Employment without a written contract and work permit is unlawful. The contract must state key terms: • job title and duties; • salary; MOHRE provides standard contracts. Employ - ers may attach additional clauses, but the main terms must comply with the Labour Law. Free zones require similar contracts, filed with their own authorities. Fixed-Term Contracts Unlimited-term contracts are no longer allowed. Since 2021, all employment contracts must be for a fixed term, not exceeding three years. These can be renewed multiple times. Employers had until the end of 2023 to update all existing con - tracts. Most companies use two- or three-year contracts with auto-renewal clauses. The law allows any agreed duration. In practice, this can function like open-ended employment. However, employers must follow legal notice procedures if they do not renew. Ending a contract without cause may count as unlawful termination. Probation Period A contract may include a probation period of up to six months. During probation, either party can terminate, but must give notice: • 14 days by the employer; and • one month by the employee (if joining another UAE employer). • work location; • duration; and • probation period (if any)
Probation can only be applied once. After proba - tion, the employee becomes permanent. If not mentioned in the contract, the employee is considered not on probation. Contract Form and Content MOHRE requires use of its standard offer letter, which becomes the employment contract. Key contents include: • salary (basic and allowances); • working hours; • annual leave (minimum 30 calendar days after one year); • notice period (30 to 90 days); • additional benefits (eg, commissions or allow - ances); and • non-compete clauses, if any (valid for a maxi - mum of two years and must be reasonable). Statutory entitlements like end-of-service gratu - ity are implied by law, even if not in the contract. Language The official version must be in Arabic. Bilingual contracts are common. In case of dispute, the Arabic version prevails. Free zones may allow English-only contracts, but Arabic translation Fixed-term contracts can last up to three years. A common clause is: “This contract is for two years and renewable by mutual agreement...”. If the parties continue working after expiry with - out signing a new contract, the law treats the contract as renewed on the same terms. Former unlimited-term contracts are now converted to fixed terms, but service continuity and legal pro - tections remain. may be needed in court. Renewal and Continuity
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