Following the deadline, UAE employers will be subject to a fine or penalty for the contracts not transferred.
The Ministry of Human Resources and Emiratisation (MoHRE) has extended the date for transferring work contracts between employees and employers, from February 1, 2023 to December 31, 2023.
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The transfer requires indefinite-term employment contracts to fixed-term employment contracts.
Employment contract in the UAE
A limited-term contract is a fixed-term contract and is normally linked to the duration of the UAE residency visa (i.e. two or three years, depending on the location of the employer). It will automatically terminate at the end of the term unless terminated earlier by either party or renewed by both parties,” according to Al Tamimi & Co.Companies based at the Abu Dhabi Global Market (ADGM) and Dubai International Financial free zones are exempted.
Following the deadline, employers will be subject to a fine or penalty for the contracts not transferred.
The Council of Ministers could extend this period based on public interest.
Multiple changes have taken place to UAE employers and employees recently including changes to gratuity calculation.
UAE in a new change announced that private sector gratuity will not include unpaid leave days. According to MoHRE, the end-of-service gratuity is calculated based on the final basic salary of the employee.
How to calculate your end-of-service benefits:
- In order to be eligible for gratuity, an employee must have completed at least one year of continuous service with the employer.
- In case an employee has been recorded as absent without pay, it shall not be included in the gratuity calculation during the period of service.
- The end-of-service gratuity is calculated based on the final basic salary of the employee.
- Gratuity is calculated according to working days (unpaid leave days are excluded), provided one year of continuous service is completed.
- For the first 5 years of employment, the employee is entitled to 21-day salary for each year served.
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