A limited contract in UAE refers to a type of employment contract that is valid for a specific period of time. This means that the employee is hired for a fixed term and will only work for the employer for the duration specified in the contract. Once the contract term ends, the employment relationship automatically terminates, unless it is renewed by mutual agreement between the employer and the employee.
Limited contracts are prevalent in the UAE, particularly in industries such as construction, oil and gas, and hospitality, where companies require a specific number of workers for a definite project or a particular season. These contracts are also common for expatriate workers, who come to the UAE to work on a temporary basis.
The duration of a limited contract in the UAE must not exceed four years, as per the UAE Labor Law. The contract must be in writing and signed by both parties. The contract should contain specific details about the job, including job title, salary, benefits, and duties. Moreover, the contract should outline the grounds for termination and the notice period required by both parties.
Under a limited contract, an employee is not allowed to terminate their employment before the contract period ends, except in specific circumstances. If an employee terminates the contract before the expiry date, they may be liable to compensate their employer for any losses incurred.
Employees on limited contracts are entitled to all labour law protections and benefits, including end of service gratuity, annual leave, sick leave, and health insurance. However, they may not be eligible to receive certain benefits that permanent employees receive, such as maternity leave or company-funded training.
In conclusion, limited contracts in UAE are designed to meet the needs of companies that require a fixed-term workforce. Employees on limited contracts have many of the same labour law protections and benefits as permanent employees, but their employment relationship is time-limited. An employer and employee should carefully consider the terms of the contract before signing it to ensure that their rights and obligations are adequately defined.