The UAE has extended the deadline for private sector companies to rectify unlimited term employment contracts of their employees to fixed-term ones. The Ministry of Human Resources and Emiratisation (MoHRE) said the new deadline now is December 31, 2023, instead of February 2.

The move will provide enough time for companies to change the contracts. “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.

A new labour law that went into effect in February last year required employers to offer fixed-term contracts to workers. Initially, a three-year cap was specified. However, in October, the ministry removed the cap, stating that the contracts must cover a defined term without specifying a limit.

The contract will remain valid as long as both the employer and the employee agree.

“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,” the MoHRE said on Monday.

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