Every private-sector employee in the UAE must have a written, fixed-term employment contract. Federal Decree-Law No. 33 of 2021, the UAE Labour Law, has applied since 2 February 2022. It sets the contract’s rules on probation, notice, work models, end-of-service gratuity and non-compete clauses. A badly drafted contract can block a work permit, start a dispute or cost you money when the employee leaves.
This guide covers what UAE employers need to know before hiring: the contract type, the six work models MOHRE recognises, probation rules, notice periods and the clauses that matter most.
Fixed-term contracts are now the only option
Under the current Labour Law, private-sector employment contracts must be fixed-term. The older “unlimited” contracts had to be converted to fixed-term contracts within a transition period. Key points from the government’s official portal:
- Renewal: a fixed-term contract can be renewed or extended for a similar or shorter period, by agreement.
- Automatic continuation: if a contract expires and both sides keep working under it, it is treated as renewed on the same terms.
- Service continuity: renewals count toward the employee’s total period of service. This matters for gratuity.
Tip: track every employee’s contract end date. A contract that quietly runs on is legally renewed on its old terms, including the old salary and old clauses.
The six work models MOHRE recognises
The law lets employers hire under several work models, not just full-time. The Ministry of Human Resources and Emiratisation (MOHRE) lists six:
| Work model | What it means |
|---|---|
| Full-time | Working for one employer for the full daily working hours on official working days. |
| Part-time | Working for one or more employers for a set number of hours or days. |
| Temporary | Working for a defined period or project, ending when the work is complete. |
| Flexible | Hours or days that change with workload and business needs. |
| Remote | Working fully or partly away from the workplace, connected electronically. |
| Job sharing | Two or more employees split the duties of one role, with pay divided proportionally. |
Employees on every model get the same core entitlements, though some benefits may be pro-rated. Pick the model before you apply for the work permit, because the permit and contract types follow it.
Probation: the rules both sides must follow
Probation is optional, but if you use it, the rules are strict:
- Maximum six months. Probation cannot be longer than six months and cannot be extended.
- It counts as service. If the employee passes probation and stays, the probation months count toward their total service.
- Employer ending probation: you must give the employee 14 days’ written notice.
- Employee moving to another UAE employer: they must give at least one month’s notice. The new employer compensates the original employer for recruitment costs unless agreed otherwise.
- Employee leaving the UAE: they must give 14 days’ notice. If they return within three months on a new work permit, the new employer is liable for the recruitment costs.
Notice periods after probation
Once probation is over, the contract must set a notice period for ending employment. Under the law, notice is at least 30 days and no more than 90 days. Both sides must respect it, so put the exact number of days in the contract.
Clauses every UAE employment contract should cover
MOHRE (or your free zone authority) provides the standard contract, and employers can add terms that do not conflict with the law. At a minimum, make sure the contract is clear on:
- Job title, work model and place of work, matching the work permit.
- Start date and contract duration.
- Basic salary and allowances, listed separately. End-of-service gratuity is calculated on basic pay.
- Probation period, if any (six months or less).
- Working hours and overtime. Overtime is limited to two hours a day.
- Notice period, between 30 and 90 days.
- Annual leave, and whether unused leave can be carried forward or paid.
- Non-compete clause, if needed: limited to a maximum of two years and restricted in place, type of work and duration to what protects a legitimate business interest.
End-of-service gratuity at a glance
Employees with more than one year of continuous service are entitled to end-of-service gratuity, calculated on basic salary:
| Years of service | Gratuity per year |
|---|---|
| First five years | 21 days’ basic salary |
| Each year after five years | 30 days’ basic salary |
Final dues, including gratuity, must be paid within 14 days of the employment ending.
Important: a high basic salary raises your gratuity liability. Agree the split between basic pay and allowances carefully at the start, because it shapes every later payment.
Common mistakes employers make
- Probation longer than six months, or “extending” probation. Neither is allowed.
- A contract that doesn’t match the work permit (different job title, salary or work model).
- No notice period written in, or one outside the 30 to 90 day range.
- Letting contracts expire unnoticed, so they renew on old terms.
- Wide, open-ended non-compete clauses that go beyond what the law allows.
- Paying final dues late, after the 14-day deadline.
Frequently asked questions
Are unlimited employment contracts still allowed in the UAE?
No. Private-sector contracts must be fixed-term under Federal Decree-Law No. 33 of 2021, and older unlimited contracts had to be converted.
Can I extend an employee’s probation period?
No. Probation can be up to six months and cannot be extended.
What happens if a contract expires but the employee keeps working?
The contract is treated as renewed on the same terms. Renew it formally to update salary or conditions.
Can I hire someone part-time or remotely?
Yes. MOHRE recognises part-time, temporary, flexible, remote and job-sharing models as well as full-time, each with its own work permit and contract.
Get employee contracts and permits handled for you
Bin Gohar PRO Services prepares employment contracts and offer letters, and handles work permits and MOHRE submissions for companies in Dubai and across all seven Emirates. Message us on WhatsApp at +971 50 178 9163 before your next hire, or see our employee documentation services.
Also useful: Trade Licence Renewal in Dubai: Steps & Documents.
Sources: u.ae — Employment contracts, duration and models in the private sector; Gulf News — 6 job models in the UAE private sector; Pinsent Masons — New UAE labour law for employers.
This guide gives general information, not legal advice. Check the specific terms with MOHRE or your free zone authority.
