Did you know that the UAE has mandated a transition from traditional permanent jobs to fixed-term contracts for all private sector employees by December 31, 2023?. With the enforcement of Federal Decree Law No. 33 of 2021, the UAE mandates that all employers transition their employees to fixed-term contracts by December 31, 2023. This change marks the end of permanent jobs as we know them.
What are fixed terms?
Fixed-term contracts are designed for specific projects, with clearly defined start and end dates, obligating employees to work for a set period. Employers compensate employees accordingly, providing clarity and structure to the employment relationship. The transition to fixed-term aims to create a more predictable and manageable workforce, benefiting both employers and employees by setting clear expectations and responsibilities.
Article (68)
The New Labour Law, effective from February 2, 2022, requires that all private sector employees (excluding those in the Dubai International Financial Centre and Abu Dhabi Global Markets freezones) be employed on fixed-term contracts. Initially set for February 1, 2023, the deadline was extended to December 31, 2023, under Ministerial Resolution No. 27 of 2023. This law allows flexibility in contract duration, eliminating the previous three-year cap, and permits employers and employees to agree on a term that suits their needs
Article (68) of the order states that “the employers shall adjust their situations and convert employment contracts with
undefined terms to fixed-term employment contracts, as per the conditions, rules
and procedures contained herein during one year from the date of its enforcement”
What does it means for Employers?
Employers operating in the UAE need to act accordingly to ensure compliance. Dubai Legal Consultants can provide the necessary guidance to transition existing contracts efficiently and effectively. This change aims to provide clear terms and stability for both employers and employees, outlining specific start and end dates for employment periods.
Conclusion
Specific requirements for hiring expatriate employees, such as obtaining work permits and visas and adhering to the sponsorship system (Kafala) and Emiratisation policies, must also be considered during this transition. Ensuring that all employees are on fixed-term contracts is not only a legal obligation but also a strategic move to align with the UAE’s evolving labor market regulations.
For further guidance on transitioning to fixed-term, reach out to the top law firms in Dubai or reputable Dubai Lawyers to ensure your business remains compliant with the new regulations. Their expertise can help you manage this transition to UAE fixed-term contracts smoothly and effectively, safeguarding your company’s operations and your employees’ futures.