Getting the employment contract right is not optional in the UAE — it is the legal foundation of every hire. Under Federal Decree-Law No. 33 of 2021, the contract governs the entire employment relationship: salary, probation, notice, termination, and end-of-service benefits. A poorly drafted or non-compliant contract exposes your business to MOHRE penalties, employee disputes, and costly labour-court claims.
This guide walks UAE employers through the current 2026 contract rules, the mandatory clauses every contract must contain, the key changes since the old law was repealed, probation and notice-period rules, and the practical mistakes that trip companies up.
The governing law: Federal Decree-Law No. 33 of 2021
The UAE’s current private-sector employment framework is Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, which came into effect on 2 February 2022. It replaced Federal Law No. 8 of 1980. A subsequent amendment, Federal Decree-Law No. 14 of 2022, removed the original three-year cap on contract duration, and Federal Decree-Law No. 20 of 2023 made further refinements.
The law applies to all private-sector employers and employees in the UAE mainland. It does not apply to federal or local government employees, members of the armed forces, police and security, or domestic workers (covered by a separate law). Free-zone employees are generally governed by their free zone’s own employment regulations, though many zones have adopted rules aligned with Decree-Law 33/2021.
The biggest change: unlimited contracts are abolished
Under the old law, the UAE recognised both limited (fixed-term) and unlimited (open-ended) contracts. Decree-Law 33/2021 abolished unlimited contracts for the private sector. All existing unlimited contracts were required to be converted to fixed-term agreements by 31 December 2023.
What this means for employers in 2026:
- Every private-sector employment contract must be fixed-term.
- There is no maximum duration — parties can agree on any length.
- If the contract expires and both parties continue, the contract is automatically renewed under the same terms.
- There is no restriction on the number of renewals.
- Unconverted unlimited contracts are now non-compliant and should be converted immediately.
What every UAE employment contract must include
The contract must be in writing, in Arabic (bilingual is common but Arabic prevails in disputes), and registered with MOHRE (or the relevant free-zone authority). It must specify:
- Employer and employee details — full legal names, addresses, Emirates ID / passport.
- Job title and description.
- Start date and contract duration — including the end date.
- Workplace location.
- Working hours — standard is 8 hours/day, 48 hours/week (reduced during Ramadan).
- Salary and allowances — basic salary, allowances, bonuses, payment frequency, currency, and WPS payment method.
- Probation period — if applicable.
- Notice period — the agreed termination notice.
- Annual leave — minimum 30 calendar days per year after one year of service.
- End-of-service gratuity — the statutory entitlement.
The MOHRE-registered contract must match the offer letter. Discrepancies are a common compliance gap and a frequent cause of complaints.
Probation period rules (2026)
Employers may set a probation period of up to six months (Article 9). It cannot be extended or repeated with the same employer. Key rules:
- If the employer terminates during probation: 14 days’ written notice. No gratuity payable.
- If the employee resigns to leave the UAE: 14 days’ notice.
- If the employee resigns to move to another UAE employer: 30 days’ notice. The new employer may compensate the original employer for recruitment costs.
- Re-employment by the same employer within three months: no new probation.
- Completed probation counts as part of the total service period.
- Employee is not entitled to paid sick leave during probation.
Notice period rules
The notice period must be 30 to 90 days (Article 43), agreed in writing. If the contract is silent, the default is 30 days. Compensation in lieu of notice applies for unserved days. The same requirements apply when a contract is not being renewed upon expiry.
Work models recognised under the new law
- Full-time: standard 8-hour day, one employer.
- Part-time: fewer hours or days.
- Temporary: specific task or period.
- Flexible: hours vary by operational needs.
- Remote / hybrid: work outside employer’s premises.
- Job-sharing: two+ employees share one full-time role.
Each model must be documented and registered with MOHRE.
End-of-service gratuity
An employee completing one or more years of continuous service is entitled to gratuity on basic salary:
- 21 days’ basic salary per year for the first five years.
- 30 days’ basic salary per year thereafter.
- Total capped at two years’ basic salary.
Sick leave
After probation and 90 days of service: up to 90 days per year — first 15 days full pay, next 30 days half pay, beyond that unpaid.
Non-compete clauses
Permitted but must be reasonable in scope, duration (max two years), and geography. Only enforceable if the employee had access to clients or confidential information. Courts may reduce or void disproportionate clauses.
Common employer mistakes
- Offer letter / contract mismatch.
- Unconverted unlimited contracts.
- Missing WPS registration.
- Vague salary structure — not itemising basic vs. allowances.
- Probation exceeding six months — automatically void.
- No notice-period clause — defaults to 30 days.
- Ignoring free-zone differences.
Free-zone contracts
DIFC and ADGM operate under common-law frameworks with their own courts. JAFZA, DMCC, and DAFZA have adopted rules broadly aligned with federal law but may differ. Always confirm the applicable regulations for your free zone.
Amending an existing contract
Use a written addendum signed by both parties and registered with MOHRE. Do not rely on verbal agreements. The addendum should reference the original contract, state the specific clause being changed, and specify the effective date. If the change affects basic salary, update WPS records accordingly. For more substantial changes (different job category, mainland to free zone, full-time to part-time), a new contract may be required.
Practical checklist for employers
- Contract is fixed-term, in Arabic, MOHRE-registered.
- Basic salary itemised separately from allowances.
- Probation period set (max 6 months) and stated clearly.
- Notice period set (30–90 days) and stated clearly.
- Contract matches the offer letter exactly.
- WPS registered before first salary payment.
- Non-compete clause reasonable (max 2 years, limited scope).
- Contracts reviewed and renewed before expiry.
- Signed copy on file and provided to the employee.
How Dynamic Logics can help
Employment contracts are where recruitment meets compliance. As a Dubai-based recruitment and immigration consultancy, Dynamic Logics helps employers draft compliant contracts, manage MOHRE registration, process work permits and visas, and onboard new hires within the current legal framework. If you are hiring and want to make sure the paperwork is right from the start, get in touch.
Frequently asked questions
Are unlimited contracts still valid in the UAE? No. Abolished by Decree-Law 33/2021; conversion deadline was 31 December 2023.
What is the maximum contract duration? No maximum. The three-year cap was removed by the 2022 amendment.
Probation period? Up to six months, not extendable. 14 days’ notice to terminate (30 days if employee moves to another UAE employer).
Notice period? 30–90 days as stated in contract; default is 30 days.
End-of-service gratuity? 21 days’ basic salary/year for first five years, then 30 days/year, capped at two years’ total basic salary.
Related guides
- Offer Letter Format UAE — the step before the contract.
- End-of-Service Gratuity — how contract terms affect gratuity.
- Work Visa Guide — what happens after the contract is signed.
Sources
- Official UAE Government Portal — Employment contracts: duration and models in the private sector
- Federal Decree-Law No. 33 of 2021 (effective 2 Feb 2022); amended by No. 14 of 2022 and No. 20 of 2023.
- MOHRE — contract registration and Wage Protection System requirements.
Last reviewed: August 2026. Informational only, not legal advice. Consult a qualified UAE employment lawyer or MOHRE for your specific situation.
