UAE scraps three-year limit on private sector employment contracts

The UAE has scrapped the three-year limit for fixed-term employment contracts for companies in the private sector, the Ministry of Human Resources and Emiratisation (MoHRE) has announced.

The amendments update the new UAE labour laws that came into effect in February 2022; however, fixed-term contracts in the private sector must still have a set duration, but the UAE will no longer insist on how long that time limit must be.

MoHRE said contracts can be renewed as long as both parties agree to the conditions. The amendment is designed to offer protection to employees and their employers in a balanced way, while enhancing the Emirates’ economic competitiveness.

Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said: “The UAE government continues to develop regulations and laws that align with what the next 50 years of UAE’s development demand.

“The laws and regulations support our business environment’s stability and improve its resiliency and attractiveness. The regulations follow the UAE’s advanced developmental model, and its fundamentals and principles that are built on justice, respecting human rights and staying ahead of changes.

“This guarantees the UAE’s continued progress, stability and pioneering stature.”

Al Awar added: “The new amendments create an advanced ecosystem of mechanisms that boost the ease of doing business, productivity, and resilience within the labour market, while amplifying its attractiveness to the business owners and talents.”

The changes come to the UAE employment law come in the same week the UAE strengthened legal obligations to domestic workers in the country.

The newly introduced Decree Federal Law No.9 for 2022 covers working hours, weekly breaks and leave for domestic workers and enshrines the right of domestic workers to a paid day off per week. It mandates that daily breaks cannot be less than 12 hours, including eight working hours.

The decree also gives domestic workers the right to be paid annual leave of no less than 30 days. If the employee has worked at the company for between six months and a year they are entitled to two days leave per month, and the employer can specify the start date of the annual leave.

The new rules say that if domestic workers wish to travel to their home countries on annual leave, their employer must pay for a return tickets once every two years. However, if the two parties agree to terminate or not renew an employment contract after the annual leave, the employer will only cover the cost of a one-way ticket.


New visa rules now in effect

In another development affecting the employment market, new rules governing ‘Golden Visas’ and long-term visas, including permits to enter and stay in the country, have come into effect in the UAE.

First announced in April, the changes have led to long-term visas being granted to investors, entrepreneurs, start-up owners, scientists, professionals in various fields and students and graduates.

The rule changes mean the benefits of long-term visas and Golden Visas have been extended to immediate family members. Children can be sponsored by the Golden Visa or Green Residence visa holder until the age of 25 – an increase from the previous limit of 18 years – with no age limit for unmarried daughters.

With the new rules, the criteria to apply for the 10-year visas have now been eased, as more people across a diverse set of professions will be offered the opportunity to apply for the Golden Visa.

The five-year UAE Green Residence visa, which targets exceptional talent, skilled professionals, freelancers, self-employed residents, investors, and entrepreneurs – replaces the previous two-year version.

A number of new entry permits and visas have also been announced that, for the first time, mean prospective employees do not need a host or sponsor. The government said this would benefit visitors, tourists and job seekers.