Under UAE Labour Law, a continuous employment contract clause is often included in contracts in the private sector.
This clause ensures that an employee’s employment is not interrupted, even if the employer changes or the company is sold.
In this article, we will discuss the purpose and impact of the continuous work contract clause on both employers and employees in the UAE, and the Continuous employment new contract.
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Table of Contents
Continuous employment contract clause.
A continuous work contract clause is a provision in an employment contract that ensures the continuity of an employee’s employment, even if there is a change in the employer or the company is sold.
This means that the employee’s service period will not be interrupted, and they will continue to receive their benefits, entitlements, and end-of-service gratuity as per their original employment contract.
Purpose of the Continuous Employment Agreement Clause.
The continuous employment agreement clause protects employees’ rights and ensures job security.
It is common for companies to change ownership or be sold, and this clause ensures that such changes do not negatively impact employees.
It also ensures that employees are not unfairly terminated or laid off due to a change in ownership or management.
How the Continuous Work Contract Clause Affects Employers.
Employers must ensure the continuous work agreement clause is included in their employees’ contracts. Failure to do so could result in legal disputes and financial penalties.
Employers are also required to honour the clause if there is a change in the company’s ownership or management.
This means that the employer must continue to provide the employee with the same terms and conditions of their original employment contract.
How the Continuous Employment Agreement Clause Affects Employees.
The continuous employment contract clause benefits employees by ensuring job security and protecting their rights.
If the company is sold or changes ownership, the employee’s service period will not be interrupted, and they will continue to receive their benefits and entitlements as per their original employment contract.
This provides employees with peace of mind and stability in their employment.
Continuous contract of employment.
An employment contract in UAE with no fixed term is known as an unlimited contract. This means that it is an open-ended arrangement, implying no specific end date for the contract.
Both parties – the employer and the employee – can terminate the contract in compliance with the regulations stated in the UAE Labour Law.
Continuous employment new contract.
The UAE’s new labour law rules forbids unlimited contracts. Rather, an employment agreement is only deemed valid if it is shorter than 3 years, and extending or renewing a contract after it expires is possible.
All employees must sign fixed-term work contracts that last up to 3 years. Upon expiration, the employment agreement can be extended or renewed multiple times.
If the contract is not extended or renewed and the parties carry on their operations as though it is still valid, the agreement will automatically renew according to the latest terms and conditions.
Employees’ total years on the job for the end-of-service gratuity will automatically increase with every extension or renewal.
FAQs about continuous work agreement clause.
Conclusion.
The continuous employment contract clause is an essential provision in employment contracts in the UAE. It protects the rights of employees and ensures job security.
Employers must ensure that the clause is included in their employee’s contracts, and they must honour it if there is a change in ownership or management.
For any legal advice or clarification regarding employment contracts, Al Mulla Labour Lawyer & Legal Consultant is the best resource for labour contract cases in the UAE.
Contact the office of Al Mulla via Whatsapp. Click here. Or visit us at our law firms: Dubai. You can also call us on phone: 00971501961291.
We recommend you learn about the Employment contract renewal clause and the Best Employment Contract Lawyer in Dubai UAE.
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Furthermore, read about the Difference between limited and unlimited contract UAE labour law Dubai.
A legal consultant specializing in UAE labor law. He regularly publishes articles on the website and writes on various areas of UAE law, with a specific focus on labor law.