There are 2 types of employment contract under UAE Labour Law. A Limited Contract is a fixed term of up to two years and Unlimited Contracts are, as they say, for an unlimited period. Most contracts in the UAE are unlimited.One of the main differences to note is on termination - under a Limited Contract, if terminated before the end of the two year term by either the employer or employee, there is a penalty payment to be made by the terminating party.End of service gratuity also varies dependant on the type of contract. See number six for more info.
Salary is to be paid at least once a month with a pay slip. Nothing can be deducted from the employee’s salary in relation to money owed to the employer in excess of 10 percent of the wage
You are entitled to 45 calendar days leave on full pay provided you have served over one year with your employer (half pay if less than one years’ service). You can claim up to 100 days additional unpaid time off provided the time off is related to an illness connected to your pregnancy and you get the necessary certification from a medical professional.
The maximum a probationary period can be is six months. It is quite usual to have a three month notice period that can then be extended only by another three months.
New ministerial decrees took effect on January 1 2016. One of the important changes to stand out was that offer letters and contracts must contain the same benefits, this is to help those employees who are offered certain terms only to have these amended in the finalised contract.
End of service gratuity is a very important benefit for employees in the UAE. As above, payment and entitlement to end of service gratuity varies on whether you are working under a limited or unlimited contract.Where an employee resigns from an unlimited term contract, the gratuity payable is based on 21 days pay for each year as follows:
- Period of service of between one to three years: 2/3 reduction
- Period of service of between three to five years: 1/3 reduction
- If the period of service if over five years there is no reduction
Under a Limited contract there is no gratuity payable if the employee resigns with less than 5 years’ service.
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