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New Labor Contracts in the UAE: 3 Key Points to Remember

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Dubai: Have you signed a revised labor contract? If you are working in the private sector in the UAE, your employer may have asked you to sign a new work contract that complies with Federal Decree No. 33 of 2021 on private sector labor relations and comes into force on 2 February 2022 . If you haven’t already, your company has until the end of the year to renew all employment contracts for its employees. Here are three things you need to know about your new job contract.

1. All contracts are now fixed term

Dr. Ibrahim Al Banna, CEO of Ibrahim Al Banna Advocates and Legal Consultants, said the new UAE labor law – Federal Decree No. 33 of 2021 – came into effect introducing a number of changes, including the removal of “unlimited contracts”.

“The new labor law made several changes, including the abolition of indefinite employment contracts and their replacement with fixed-term agreements for a maximum period of three years, renewable for a similar or shorter period. Later, MOHRE announced the cancellation of Federal Law No. 14 of 2022 The three-year limit on fixed-term contracts in the decree. With this amendment, employers are free to determine the duration of employment contracts,” said Dr Al Banna.

He added that employers must mention the duration of the employment contract, which can be of any duration.

2. Your new contract may have an automatic renewal clause

“Many employers who have amended their employment contracts opt to include renewal clauses to ensure their employment contracts are not terminated at the end of the term…Employees need to carefully review the length or duration of the contract and its automatic renewal provisions,” Al Banna said.

Many employers who have amended their employment contracts choose to include renewal clauses to ensure their employment contracts are not terminated at the end of the term…employees need to carefully review the term or duration of the contract and its auto-renewal clause.

– Dr. Ibrahim Al Banna, CEO, Ibrahim Al Banna Advocates and Legal Consultants

3. The notice period remains unchanged

If contracts are now considered to automatically renew at the end of their term, what happens when you wish to quit your job? According to Dr Al Banna, both the employer and the employee must give notice to the other party of the decision to terminate the employment relationship. The length of the notice period remains the same in the new law – it can be anywhere between 30 and 90 days, unless the parties agree otherwise.

“The new law does not change the employee’s position when changing jobs, as he or she can pay for the days of service agreed in the employment contract and he or she will receive all end-of-service benefits, similar to the previous labor law,” Al Banna explain.

Sign a new contract?Look at these 7 details

It’s never easy to read the fine print of any contract, but it’s important to know the details of your contractual relationship with your employer.

Shehab Abdelrehem, legal counsel at Hussain Lootah and Associates, Attorneys and Counselors at Law, advises employees to pay special attention to seven specific aspects of their work contract.

“We always recommend reading all sections carefully before signing a contract to avoid any misunderstandings. However, when it comes to employment contracts, it is especially important to scrutinize some clauses,” says Abdelrehem.

1. Date of appointment
2. Role/Position
3. Trial period
4. Working hours
5. Salary Details
6. Bonuses/shares (if applicable)
7. Notice period

“While many of the above things may seem obvious, most employees do not fully understand their rights and obligations. Pay breakdowns are important because gratuities and annual leave pay are based on base pay,” he said.

We always recommend reading all sections carefully before signing a contract to avoid any misunderstandings. However, when it comes to employment contracts, it is especially important to scrutinize some clauses.

– Shehab Abdelrehem, Counsel, Attorney and Legal Advisor, Hussain Lootah and Associates

In cases where labor cases are brought to court, judges may even in some cases include bonuses, shares or commissions as part of someone’s salary to calculate gratuities, annual leave compensation and arbitrary dismissal, he added. new salary.

Do you have any questions about the topics covered by Living in the UAE?write to us readers@gulfnews.com.



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