In an update to new labour regulations that went into effect in February, the UAE government published a new directive abolishing a three-year restriction on the duration of fixed-term employment contracts in the private sector. Under the new amendments, employment contracts must now span a defined period, but there is no longer a time limit on how long the contract may be.
Contracts can be renewed, according to the Ministry of Human Resources and Emiratisation, as long as both parties agree to the terms. According to authorities, the modification intends to safeguard both parties, accelerate labour market growth, and boost the UAE's economic competitiveness. Significant amendments under labour regulations, initially proposed in November, stated that labor contracts may not be longer than three years.
As per the direction of the late Sheikh Khalifa, all indefinite contracts were to be converted to fixed-term agreements which could be renewed, in line with the Federal Decree-Law No 33 of 2021. Employment contracts must include a specific length agreed upon by an employer and employee under the modified laws, enacted by Federal Decree-Law No 14 of 2022, although "the law does not place a cap on that period."
"The UAE government is continuing to design laws and rules that will fulfill the demands of the UAE's development over the next 50 years," said Abdulrahman Al Awar, Minister of Human Resources and Emiratisation. Laws and regulations provide a stable and desirable business environment. The UAE's advanced growth model, as well as its principles and objectives, which are based on justice, human rights, and keeping ahead of change, are congruent with these values and ambitions. This ensures the UAE's ongoing growth, stability, and pioneering status." The new amendments provide an advanced ecosystem of mechanisms that improves the ease of doing business, productivity, and resilience in the labour market while increasing its attractiveness to company owners and talent.
Improving Job Security
The action will create the possibility for firms and employees to sign long-term contractual agreements, giving further stability. The modified law controls private-sector employment interactions. Except for the Dubai International Financial Centre and the Abu Dhabi Global Market, this applies to employees in both free zones and mainland enterprises. Employees in the public sector and domestic workers are exempt from the requirements.
"The revision aims to protect all parties in a balanced manner; [it] encourages labour market growth and stability, and increases the UAE's economic competitiveness," according to the ministry. The new labour standards, which went into effect in February, transformed the private sector work scene, allowing for more flexible working hours for employees and less red tape for firms. The legislation passed in late 2021 superseded a statute initially drafted in 1980, affecting 4.9 million employees.
Additional rules enacted earlier this year targeted at making it simpler for businesses to recruit workers for part-time work and allow for job sharing. Employers can now give youngsters aged 15 and above part-time paid jobs as well as crucial industry experience.