Firms 'scrambling' to meet UAE employment contract deadline

Many companies have left the requirement to the last minute

Firms must submit fixed-term contracts for employees by February 1 or risk being fined. Getty Images
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Companies in the UAE are scrambling to meet the deadline for changes to employment contracts, according to a leading lawyer.

Firms must submit fixed-term contracts for employees by February 1 or risk being fined.

Initially, it was announced that companies must provide a fixed three-year contract for all staff. However, the government scrapped this in October and allowed employers to agree on the duration with employees.

This has led to many companies who had previously submitted proposals before October having to redraft contract agreements.

“There are a lot of companies that are trying to scramble together and make sure everything is ready ahead of the deadline,” Sabrina Saxena, senior counsel with law firm Al Tamimi and Company, told radio station Dubai Eye.

“That’s partly because the labour authorities changed their position over the last few months in terms of the templates they were putting together.

“The term of the contract used to have a three-year cap but the labour law was changed towards the end of last year, so now a lot of companies are trying to get to grips with the changes and put the contracts in place.”

Businesses that fail to meet the February 1 deadline run the risk of incurring fines, even though the government has not announced how much.

Ms Saxena said the fines would most likely be issued to employers rather than staff members if contracts were not updated in time.

“I can’t imagine that any employee would be fined as a result of not transitioning across to a fixed-term contract,” she said.

“The onus is on the employer to make sure all employees are transitioned across.”

The changes to employment contracts affect all workers in the UAE unless they are in the Abu Dhabi Global Market and Dubai International Financial free zones.

Families employing domestic workers are also exempt from the changes.

The change will allow firms and staff to agree on part-time work, job-sharing and project-based tasks with more ease.

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Updated: January 27, 2023, 7:13 AM
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