The UAE has extended till the end of the year the deadline for private sector enterprises to transition from unlimited employment contracts to fixed-term agreements.
Companies were supposed to change the contractual status of their employees by Thursday, but that deadline has now been pushed back to 31st December.
As per the Ministry of Human Resources and Emiratisation, the measure will provide firms with more time.
“The decision stems from our belief in enhancing flexibility, competitiveness and ease of business for private sector companies and safeguarding all parties’ rights,” the ministry said.
“Providing enough time for companies to change the contracts supports the labour market; our role is providing all the necessary tools for companies to succeed and flourish; ease of business is definitely an important approach that we adopt in the market.
“The private sector is a partner in the UAE’s development journey. We value its contributions to the UAE’s GDP. We have recently witnessed the private sector’s achievements in Emiratisation, which significantly helped to raise the overall rates of Emiratisation in the UAE.”
It was announced in the beginning that employers must supply all employees with a fixed three-year contract. However, the government repealed this in October and permitted businesses and employees to agree on duration with employees.
As a result, some businesses that submitted proposals before October were required to draft contract agreements again.
“There are a lot of companies that are trying to scramble together and make sure everything is ready ahead of the deadline,” Sabrina Saxena, senior counsel with law firm Al Tamimi and Company, said.
“That’s partly because the labour authorities changed their position over the last few months in terms of the templates they were putting together.
“The term of the contract used to have a three-year cap, but the labour law was changed towards the end of last year, so now a lot of companies are trying to get to grips with the changes and put the contracts in place.”
Unless they work in the Abu Dhabi Global Market or Dubai International Financial free zones, all workers in the UAE will be affected by the changes to employment contracts. Families that hire domestic workers are also exempt from the reforms, which are being implemented to make it easier for firms and employees to agree on part-time employment, job sharing, and project-based activities.