New UAE rule on job contracts: Top questions answered

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The UAE's Ministry of Human Resources and Emiratisation (Mohre) on Friday updated its regulation on employment relationships — providing greater flexibility by removing the limit on the duration of job contracts.

Experts hailed the decision, saying this would help create a "more balanced environment for both employers and employees".

"All the reforms that have taken place in the last couple of years boost the UAE to become the best country to live and work in," said lawyer Ashish Mehta.

Here's what we know so far based on the Mohre announcement and insights of industry experts:

How will fixed-term contracts change with the latest update?

With the UAE's new labour law that came into force on February 2, indefinite contracts should be changed to fixed-term agreements. It specified that "a worker can be hired on a fixed-term employment contract for up to three years".

However, under the latest amendment, this three-year cap will be lifted.

What was the previous policy?

Employment contracts used to be synchronised with the visa status of an employee, lawyer Ashish Mehta said. This meant that these contracts were limited to the two and three-year validity of previous residence visas.

"However, with the new announcement, the Mohre contract could have a much longer duration than the visa status of the applicant," Mehta said.

Will companies be able to issue a contract for five or 10 years?

The amendment stated that all employment contracts must cover a definite term — but no limit has been set for that term period.

The contract can be renewed and will remain valid as long as both the employer and the employee agree on the stipulated conditions.

What does the new labour law say about flexible work models?

Experts say the amendment comes right at the time when more flexible work models have become available.

Under the new labour law that came into effect in February, employees now have the opportunity to get flexible, temporary or part-time contracts when applying for jobs.

Employees can combine more than one job model as long as it doesn't violate the maximum number of hours stated in the law, which are 48 hours a week and 144 hours for three weeks.

Here are the work models that people will be able to obtain:

Part-time work: The scheme allows employees to work for more than one employer for a specific number of hours or days either on-site or remotely in accordance with the contract.

Temporary work: Employees are hired on a project basis or for specific tasks. Contracts end with the project's completion.

Flexible work: Contracts under this scheme enable employees to work on different days and times depending on the job conditions and requirements. Employees may choose their working hours.