Know This in UAE: Unlimited Contract with Your Employer, Can Be Changed Or Not

Employers may have to change the unlimited period of employment contracts to limited ones within one year from the effective date of the New Employment Law. This is in accordance with Article 68 of the New Employment law, which states: “1. The provisions of this Decree Law shall apply to indefinite term Employment Contract concluded under the referenced Federal Law No. 8 of 1980.

“2. Employers shall, within one year from the date of entry into force of this Decree-Law, adjust their respective positions and change indefinite term Employment Contracts to definite term Employment Contracts, in accordance with the conditions, controls and procedures set forth herein. Such period may be extended by the Minister for other periods, as dictated by the public interest.

“3. Subject to paragraph (2) above, the Employer may calculate the gratuity in accordance with the provisions of the indefinite term Employment Contract sated in the referenced Federal Law No. 8 of 1980.”

The employer and employee may terminate the unlimited period of employment contract which are signed before the effective date of New Employment Law by serving stipulated notice period as mentioned in Article 65 (6) of the New Employment Law.

Article 58 to Article 64 of the New Employment Law states the penalties that need to be borne by the employer as well as the employee for breach of provisions of the new law. The employers may have to bear penalties ranging from Dh50,000 to Dh200,000 for violations of Article 60 of the New Employment Law. The violations include matters related to employing an individual without work permit, misuse of work permits, closures of the entity without payment of employees end of service benefits, recruiting an employee and not assigning him any work.

Ref: Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom, and India.

Source:khaleejtimes