United Arab Emirates: Three-Year Limit Removed from Private Sector Employment Contracts

The Cabinet of the United Arab Emirates has amended a regulation issued earlier this year, which permitted limited-term employment contracts with solely a three-year maximum duration for all private sector employees, excluding employers and employees in the Abu Dhabi Global Market and Dubai International Financial Center free zones. Effectively immediately, employment contracts for this sector are no longer limited to three years, as long as both the employer and employee mutually agree to a contract with a longer duration. However, contract durations will continue to remain on a limited basis and cannot be negotiated for an unlimited duration. Employers in the private sector are advised to review and amend employment contracts if they are currently on an unlimited timeframe by February 1, 2023 to avoid possible fines or sanctions. Note that the exempted zones remain unaffected by this development.