Dubai Limited Labour Contract

Limited Labour Contract

The novel decisions of the Ministry of Labour indeed entitles the member of staff who completed two years in service with the employer to transfer to a new employer without the need for No Objection Certificate but for this purpose it required that the contract shall be for unlimited period. But if the contract is for a limited period, the employee must not break the contract before the term, otherwise, he shall lose his labour rights. Besides, the employer would be entitled to apply for the Ministry of Labour to impose a one-year ban on the employee.

Frequently Asked Questions

A limited contract cannot be terminated before completion

Q: My wife has been working in a ladies saloon for almost four years under a contract for limited period which expires next year, she is on my sponsorship. My questions here are; Can my wife leave work immediately or by giving three months notice to the company as per the side contract not labour contract? The side contract mentions three months notice. If the company does not accept the resignation, will the Ministry of Labour impose a work ban on my wife, though she is under my sponsorship? Is it a must to work during the notice period in a limited contract? Please advise.

A: I would like to clarify to the questioner that his wife is working on a contract for a limited period and if the contract is terminated pre-term, she will lose her labour rights except the right related to leave only.Also, the wife might be requested to compensate the employer an amount equivalent to a salary of 45 days if the employer proves that he suffered a loss or was affected by such behaviour.

Finally, the employer might request the Ministry of Labour to impose a one-year ban on the wife due to this violation even if the wife is not under the company's sponsorship and finally there is no notice period in a limited contract.

Breaking a limited contract

Q: I am working in Sharjah under a two-year limited contract. Recently, I was offered a job in a Dubai-based company and they want me to join by next month. Can I resign before end of the contract?

A: As per Article 116 of the UAE Labour Law, you shall be required to compensate your employer for any loss he may sustain as a result of the termination of the contract, provided that the amount of compensation shall not exceed half the workers remuneration for three months or the residual period of the contract whichever is shorter unless the contract contains a provision to the contrary. Therefore, you need to inform your employer in advance that you wish to resign.

However, the employment agreement, according to Article 113, can be terminated only by both parties’ acceptance. This can be done through submitting a resignation to the employer and giving a notice period of 45 days.