An onshore private sector employee in the UAE must be on a written, fixed-term employment contract registered with the Ministry of Human Resources and Emiratisation. Unlimited-term contracts were abolished by Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relations, and the transition window for converting legacy contracts closed in early 2023.
The Labour Law came into force on 2 February 2022 and has been amended more than once since, by Federal Decree-Law No. 14 of 2022, Federal Decree-Law No. 20 of 2023 and Federal Decree-Law No. 9 of 2024. Cabinet Resolution No. 1 of 2022 carries much of the operating detail. Anyone working from a pre-2022 précis of UAE employment law is working from the wrong document.
What kind of employment contract must a UAE employer use?
Onshore employers must use the standard bilingual contract issued by the Ministry, in Arabic and English, registered against a work permit. The registered contract is what the Ministry treats as the operative document in a dispute. A separate, unregistered contract in more elaborate terms can sit alongside it, and commonly does, but it cannot give the employee less than the registered version.
Free zone employers outside DIFC and ADGM generally apply the federal Labour Law, with the zone authority issuing the permit and registering the contract on its own system. DIFC and ADGM are separate jurisdictions with their own employment statutes, and contracts there are not registered with the Ministry at all.
Is there still a maximum length for a fixed-term contract?
No. The original version of the Labour Law capped fixed-term contracts at three years. Federal Decree-Law No. 14 of 2022 removed that cap, and the position now is that the contract is for a fixed term of whatever length the parties agree, renewable or extendable by agreement.
Two consequences follow. Renewals and extensions count towards continuous service, so they feed into end of service gratuity rather than resetting the clock. And if the parties simply carry on performing the contract after the stated end date without signing anything, the contract is treated as renewed on the same terms. Employers that let a term lapse and then argue the employment ended automatically tend to lose that argument.
What must the employment contract actually say?
The Labour Law and its implementing regulations set out the particulars that must appear. In practice the Ministry’s standard form prompts for all of them:
- Full details of employer and employee, and the employee’s qualifications
- Start date and the duration of the contract
- Job title and place of work
- Wage, including basic wage and any allowances and benefits
- Working hours and rest days
- Any probation period
- Annual leave entitlement
- Notice period and the procedure for termination
The split between basic wage and allowances deserves attention when the contract is drafted, not afterwards. End of service gratuity and payment for accrued annual leave are both calculated on basic wage. A package that is nominally generous but has a small basic produces a smaller gratuity, and employees often do not discover this until they resign.
How does the offer letter relate to the registered contract?
The sequence is offer letter, then work permit, then registered contract. The offer is signed first and is submitted as part of the permit application, and the registered contract that follows should reflect it.
Where the two diverge, the safe working assumption is that the employee can rely on whichever is more favourable, and that an employer cannot use the registration step to quietly downgrade terms the employee accepted. Employees who are asked to sign a Ministry contract on arrival that differs from the offer they accepted abroad should raise it before signing, keep the offer letter, and not assume the difference is a formality. This is one of the most common complaints reaching the Ministry from newly arrived staff.
Which terms cannot be contracted out of?
The Labour Law sets a floor. A contractual term that gives the employee less than the statutory minimum is void to that extent, while a term that is more generous is valid and enforceable. The floor includes minimum annual leave and sick leave, end of service gratuity after a year of continuous service, notice periods, working hour and rest day limits, health and safety obligations, and the protections against discrimination and harassment.
Some further points that are often misunderstood:
- Recruitment costs cannot be charged to the worker. The employer bears them.
- Wages must be paid through the Wage Protection System for employers within its scope, on the due dates.
- Passports cannot be retained by the employer.
- A non-compete is permitted but limited. The Labour Law allows a restriction of no more than two years, and it must be limited as to time, place and type of work to be enforceable.
What work models does the law allow?
The Labour Law recognises several models beyond conventional full-time employment: part-time, temporary, flexible, remote work, job sharing, and condensed hours arrangements. Each has its own permit type and its own pro rata treatment of leave and end of service entitlements under Cabinet Resolution No. 1 of 2022.
An employee can hold more than one job with the right permits. Employers should not assume that a second role is automatically a breach of contract or grounds for dismissal, and should check the permit position before acting.
Where do employers and employees get caught out?
Three patterns recur. The first is the two contract problem, where a detailed English language contract sits alongside a thinner Ministry contract and the two say different things about notice or wage. Keep them aligned, and record the basic wage the same way in both.
The second is stale documentation. Contracts drafted before February 2022 that still refer to unlimited terms, or to the old three-year cap, signal that the employer’s whole template has not been reviewed. Termination and gratuity clauses drafted under the old law are the ones most likely to be wrong.
The third is assuming the free zone position matches onshore. DIFC and ADGM have their own rules on notice, leave, end of service and settlement agreements, and an onshore template used in DIFC will be non-compliant in places.
Registration, permit and amendment fees are set by the Ministry or the relevant free zone authority and change from time to time. Check the current schedule rather than relying on a figure quoted in an older article.
This article is general information about UAE law as at September 2026 and is not legal advice. The position varies by emirate and by free zone, and it changes often. Take advice on your own facts before acting.
Frequently asked questions
Are unlimited contracts still allowed in the UAE?
No. Federal Decree-Law No. 33 of 2021 requires onshore private sector employment contracts to be for a fixed term, and the window for converting legacy unlimited contracts closed in early 2023. The original three year cap on fixed terms was later removed, so parties can now agree whatever duration suits them, renewable by agreement.
What happens if my contract expires and nobody signs a new one?
If both sides carry on performing the contract after the stated end date without renewing it, the contract is treated as renewed on the same terms and conditions. Extensions and renewals count towards continuous service, so they feed into end of service gratuity. An employer cannot usually argue the employment simply ended on the expiry date.
Does the offer letter or the MOHRE contract govern my employment?
The registered Ministry contract is the document the authorities work from, but an employer should not use registration to reduce terms the employee already accepted. Keep the signed offer letter. If the contract presented on arrival differs from the offer, raise it before signing rather than treating the difference as a formality.
Can a UAE employment contract include a non-compete clause?
Yes, within limits. The Labour Law permits a post-employment restriction of no more than two years, and it must be limited as to time, place and type of work to be enforceable. A blanket restriction with no geographic or sector boundary is unlikely to be upheld. DIFC and ADGM apply their own rules on restrictive covenants.
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