This article will explore the difference between limited and unlimited contract uae labour law regarding termination, end-of-service gratuity, and renewal.
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Table of Contents
Difference between limited and unlimited contract UAE labour law.
The primary difference between a limited and unlimited contract is flexibility. A limited contract has a specified duration, while an unlimited contract is open-ended.
In a limited contract, the employer and employee must agree on a contract renewal to continue the employment relationship. In contrast, no renewal is necessary for an unlimited contract as it has no termination date.
An unlimited contract is a contract that does not have a fixed term, meaning there is no established termination date. The employer or the employee can terminate the contract for various reasons under the UAE Labor Law.
Employers must specify the start date, nature of work, remuneration, and workplace in an unlimited contract.
Mohre limited contract.
A limited contract has a specified duration, usually valid for two or three years, and it is also known as a fixed-term contract. Both parties must agree on a contract renewal to continue the employment relationship.
If the employee decides not to renew, they must submit a non-renewal letter to the employer.
Limited vs unlimited contract UAE gratuity.
The end-of-service gratuity pay is different depending on the type of contract.
For limited and unlimited contracts terminated by the employer, 21 days of basic pay is awarded for the first five years of service and 30 days for each additional year.
For limited contracts terminated by the employee, they are not entitled to gratuity pay if they have less than five years of service.
For unlimited contracts terminated by the employee, the gratuity pay varies depending on the length of service.
Consult with experts like our labor lawyer in Dubai for professional assistance.
FAQs about difference between limited and unlimited contract.
Conclusion.
In conclusion, understanding the difference between limited and unlimited contract UAE labour law is essential for expatriates. The recent changes in UAE labour law require employers to transition employees from unlimited to limited contracts.
Employers and employees can make informed decisions regarding their employment relationships by knowing when to use a limited or unlimited contract, how to terminate them, and how to renew them.
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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.
