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UAE: Grace period for changing unlimited job contracts extended

Thursday January 26, 2023

Employers now have until December 31, 2023 to make the changes

Abu Dhabi: The Ministry of Human Resources and Emiratisation has announced that the deadline for correcting the current conditions granted to employers, especially regarding the transfer of work contracts concluded and signed between workers and employers, will be extended from indefinite-term employment contracts to fixed-term employment contracts until December 31, 2023.

According to the UAE Labour Law, which came into force on February 2, 2022, the employment contract is concluded for the employee for a specified period, not exceeding three years, and it is permissible, by agreement of the employer and the worker, to be extended or be renewed for a similar period or for a shorter period once.

If the employer and the worker continue to implement the contract after the expiry of its original term without an explicit agreement, the original contract shall be considered extended under the same conditions contained therein.

In the event of an extension or renewal of the contract, the new period or periods shall be considered an extension of the original period and shall be added to it in calculating the employee’s continuous service period.

Unspecified work contracts will be converted into fixed-term work contracts within one year from the date of entry into force of the new labour law and in accordance with the conditions, controls and procedures contained therein.

The Council of Ministers may extend this period for other periods as required by public interest.

According to the new decision, the transfer of work contracts concluded and signed between workers and employers in the private sector will be extended from indefinite-term employment contracts to fixed-term employment contracts until December 31, 2023. Therefore, the two parties will have enough time to adjust the conditions of workers and employees during the period until the end of the year 2023.

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