Have you signed a new employment agreement yet? In accordance with Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations in the Private Sector, which came into force on February 2, 2022, if you work in the UAE’s private sector, your employer may have already asked you to sign a new work contract. If you haven’t already, your business has until the end of the year to revise all of its employees’ employment contracts. Here are three facts regarding the new employment contracts that you should be aware of.
1. All contracts are now fixed term
With the implementation of the new UAE Labour Law, Federal Decree-Law No. 33 of 2021, various modifications were made, including the elimination of “unlimited contracts.”
The New Labour Law made a number of changes, including the elimination of employment contracts with unlimited terms and their replacement by fixed-term contracts with a maximum duration of three years that may be renewed for a similar or shorter time. Later, MOHRE declared that Federal Decree-Law No. 14 of 2022 would eliminate the three-year restriction on fixed-term contracts. Employers are now able to choose the duration of employment contracts as a result of this legislation.
The employer must specify the length of the employment contract, which may be for any amount of time.
2. Your new contract may have an automatic renewal clause
To ensure that their employment contracts do not expire at the end of the term, many companies who have previously modified their employment contracts have decided to include a renewal clause. An employee must pay special attention to the contract’s term or duration and its auto-renewal clause.
3. The notice period remains unchanged
What happens if you want to leave your work if contracts are now regarded to be renewed automatically after the term is up? Dr. Al Banna claims that in order to dissolve a working relationship, both the employer and the employee must give the other party notice. The length of the notice period under the new law is unchanged; unless both parties agree otherwise, it may range from 30 to 90 days.
The employee’s position regarding changing jobs is unaffected by the new law, as long as they give the notice required in their employment contract for the number of days to be served and get all end-of-service benefits in accordance with the previous labour law.
Also Read: Is it possible to be put on probation twice under UAE Labour Law? Dubai Courts raise awareness
Signing your new contract? Check these 7 details
Even though reading a contract’s fine print is never simple, it’s crucial to understand the specifics of your legal requirements to your employer.
Employees are expected to pay close attention to seven key areas of the employment contract.
To prevent any misunderstandings, we always advise carefully reading every aspect of a contract before you sign it. However, it is especially crucial to carefully study a few clauses in employment contracts.
These are:
- Date of employment
- Role/position
- Probation period
- Working hours
- Compensation breakdown
- Bonuses/shares, if applicable
- Notice period
Even while many of the above requirements and rights seem clear, most workers are not completely aware of them. Because bonuses and annual leave pay are based on base pay, compensation breakdowns are crucial.
When determining gratuities, yearly leave compensations, and unfair dismissals based on the new wage in labour cases that go to court, the judge may in some cases even consider bonuses, shares, or commissions to be part of a person’s salary.