UAE is a booming business hub for all those who plan to explore new horizons. However, before setting your foot there, one needs to be fully aware of the binding conditions that the contract encompasses. After all, as an employee, you should be well aware of the conditions that you have signed.
Generally speaking, Unlimited-term contracts are known for their convenience and benefits for the employees. The UAE Labor Law, specifically works to protect the rights of its employees and employers, thereby strengthening the workforce, reducing the turnover rate, and ensuring stability.
Choosing the Right Contract Category
Making the right choice of choosing a contract can make a great difference to your future work status in the UAE. This can also ease out the process for visa application, travel and living expenses, end-of-service benefits, and even termination as per article 117 UAE Labour Law. Therefore, based on your work and project nature, choose the right contract options.
Time Duration
The most promising thing about the unlimited-term contract is the unlimited time attached to the contract. As a company, it gives you the leverage to hire a resource, even if you aren’t sure if that person will be the right one for the job. Similarly, it allows the employee to work at the company and see if it suits them the best. This work choice and flexibility are only available if the time is there, and the UAE ensures to give you that.
Termination
Since there is no end date of the contract, the employees and the employer can choose to terminate the contract. However, there are certain conditions that apply to either party planning to come out of the contract. For instance, the employment contract will conclude if there is any gross misconduct or identity fraud as per Article 120. The employer can immediately remove the employee without any compensation.
Moreover, the employee can only terminate the contract, if the employee fails to meet their obligations, as outlined in Article 121. However, the employee will still be liable to pay compensation to the employer.
Notice Period
Under article 117 of the labour law, a notice period of 30 working days applies when concluding the unlimited-term contract. In order to extend it, mutual agreement between the employee and the employer can make it happen. This notice period allows the employee to find the right replacement and train them during this time. While on the other hand, the employer can also figure out a new job opportunity and switch.
Employee Retention
Employees are the most important asset of any company. Hiring, acquiring, and training them requires a lot of time, money, and effort. A high turnover means increased expense on these employees. Therefore, HR departments have a lot of pressure to hire the right resource and retain them. With an unlimited contract in place, the salary remains the same throughout the entire service, unless something else has been agreed upon.
End-of-service Gratuity
An end-of-service is due to anyone who has remained in employment unless dismissed without notice as underlined in Article 120. Once the employee has completed one full year of service, he is entitled to receive the gratuity.
While with an unlimited contract, the employee has a right to one-third of the gratuity if he leaves once he has completed at least one year, two-thirds if he has completed more than three years, and the full amount after five years of employment.
The Way Forward
UAE has grown to become a popular option in light of its unlimited contracts. It provides flexibility, stability, and assurance to both the employees and the employers. In case of any unfortunate event, either party can hire lawyers in Dubai and seek protection under the UAE labour law. Known for transparency and just decisions, it is definitely something that you might want!
