UAE deadline fast approaching to convert employment contracts from unlimited to limited term

Following the implementation of the UAE Labour Law that came into force on 2 February 2022, all employees in the private sector (except in the Dubai International Financial Centre and the Abu Dhabi Global Market) must be employed on limited term contracts by 31 December 2023. The deadline is nearly upon us but there's still time to comply if employers act quickly.

What do employers need to do?

Failure to convert unlimited term employment contracts to limited term contracts before the end of this year may result in penalties in accordance with Ministerial Resolution No. 27 of 2023 issued by the UAE Ministry of Human Resources and Emiratisation. Key steps for employers to take to avoid them include the following:

1. Review contracts: Conduct an audit of your existing employment contracts to identify which ones are unlimited term.
2. Documentation: Decide what approach to take with documentation and whether to use this as an opportunity to undertake a comprehensive review and update of employment contracts to take account of the broader changes in the law, or do the bare minimum to comply. Given the time constraints, some employers might opt for a pragmatic interim strategy, swiftly implementing changes for immediate compliance with the statutory deadline, while planning a comprehensive review in due course.
3. Communication: Proactively communicate with your employees to explain the reasons behind the conversion to mitigate concerns and ensure a smooth transition.

Get in touch

Our team is available to provide guidance and support to ensure a seamless transition.

For help in preparing for, or implementing, the above or if you have any related questions, please contact any member of the Middle East employment team, or your usual contact, at Stephenson Harwood.