Employment or labor contract is mandatory for the people who are willing to work in the UAE. The labor contract is an agreement between the employer and the employee. The contract should be submitted within fourteen days of the employee arrival in the UAE. Ministry of Human Resource and Emiratisation (MoHRE) approves the labor contract.
The employment contract or labor contract involves complex written documents. The contract needs to be printed on x3 for distributing it to various sources. It has to be submitted to the labor department for obtaining a work visa. There is a lot of information to know about the labor contract.
Application of an Employment Contract
The employment contract can be applied though eNetwasal services and can be collected from TASHEEL office after the labor card approval or you can also print it directly from MoHRE website. The labor contract will be issued based on the type of employment contract.
Employment Contract Types
There are 2 types of contracts. One is the public sector and the other one is the private sector.
Public Sector Employment Contract
- An employee works for full working hours/days and receives total salary and allowances as per his position.
Part-time employment contract:
- An employee works under limited hours for total working/hours and receives his/her pay in proportion to the number of working hours/days.He/She also entitled with allowances and benefits as per his position.
Temporary employment contract:
- An employee works for full working hours/days on a contract basis for a period of 3 months. The contract period can be renewed for the same period.He/She also entitled with allowances and benefits as per his position.
- An employee is appointed by the minister for a higher position in the ministry for a contract period of 2 years. This contract period can be renewed for a similar period. Remuneration is in limit and is approved by the cabinet.
Private Sector Employment contract
Limited term contract (fixed-term):
- This employment contract has the start and end date of employment. And the contract is terminated automatically as soon as the contract ends. This type of contract is issued for a period of 2 years. Employees under this contract deal with a specific project which will be held for a specific time.
Unlimited term contracts:
- It is the common, flexible and open-ended contract in the UAE. The contract can be suspended by mutual consent or by giving probation for a period of one/three months.
- If the employee or employee terminates the contract without following the legal procedures. The wronged party will be liable for compensation and legal actions.
- In the year 2018, a new contract has been implemented which allows organizations to employ skilled workers from inside or outside the country under a part-time contract system. Skilled workers mean people who hold university degrees or higher than that. Generally, they are the people who finished their diploma in the scientific/technical field for 2 or 3 years.
- Under this system, an employee can take-up multiple part-time jobs and need not take any approval from the original/secondary employers. But they have to get a permit from the MoHRE. This system follows similar rules and penalties which are applicable to the normal labor contracts in the UAE. Part-time can be changed into a regular contract only after the completion of the part-time labor contract.
Termination of Employment Contract
Conditions for terminating labour contract:
- This type of contract is terminated if both the parties (employee and employer) or anyone party terminate the contract by themselves.
- If the contract is expired and if it is not renewed, then also this type of contract is terminated.
- If an employer commits any of violations as per Article 120 of the UAE labor law then also the contract is terminated.
- Both employer and employee can mutually terminate the contract.
- If one party wishes to terminate the contract then he/she should abide by the contract terms like serving the notice period, which can be one month or a maximum of 3 months
- If either party wishes to terminate without complying the legal terms, then the terminating party will bear the legal consequences for early termination
Termination without notice:
- The employer can terminate the contract as per the amendments of Article 120 of the UAE labor law without notice.
- The employee can terminate the contract as per the amendments of Article 121 of the UAE labor law without notice.
If the amendments in article 122 and article 123 of the labor law are met then the labor contract will be terminated.
After terminating the contract and canceling work visa, a 30 day grace period is given so that he can either obtain a new residence permit or leave the country.
Check: How to calculate Gratuity?