The Limited Un-Limited Contracts UAE

July 25, 2021

The Discussions about Labour and Employment Law, Labour and Employment Law disputes have been most discussed, subjects in UAE as well as the entire world. Employees around the world are always ready to earn more. This passion to earn more let them switch jobs, change the places and countries. But employers who train employees and provide them with an opportunity to earn and get settled in the country, do not want an employee to go without taking the maximum benefits. Therefore the Labour and Employment Laws are made to govern the employment rules, standards etc. Therefore the employment, resignations, terminations, workplace issues, workplace harassment, discrimination, unpaid salaries, unpaid end of service benefits etc, are the hot debates in society. United Arab Emirate also has the rules and laws for labour and employment matter called UAE Labour Law.

Limited Contract and Unlimited Contract Terminations: 

Many working-class ex-pats in UAE are hired on two types of contracts e.g. Un-limited Contracts and limited-term contracts. Employees hired on a limited contract can be hired for a maximum of two years. Limited Contract can only be terminated by an employee when there is a valid reason like unpaid salaries for continuously months, harassment, etc.

Labour and Employment Law Attorneys can be consulted in this regard. If an employee terminates the contract without a valid reason then he has to pay the compensation of early termination which is the salary of 45 days or the remaining period of the contract, whatever will be shorter between the two, and the employer also has the right to put 6 months to 1-year labour ban.

The employer also has no right to terminate the contract without a valid reason. Check with expert employment lawyers in this regard. A limited Contract can be renewed with the mutual consent of both parties. A renews limited contract is free from the early termination rules of 1st limited contract. Probation Periods must be served and notice periods are mandatory in limited contracts.

Unlimited Contracts can be terminated any time after the probation period is over. There is no notice period in limited contracts. But after a resolution passed in 2016, it was also decided that both parties can terminate the limited contract with mutual consent. The employers are not bound to serve a warning notice before the termination of the employee if the reason is valid.

If the termination is based on harassment, discrimination, or unpaid salaries then the employee has the right to contact MOHRE. If the employer is an owner of the company then it does not mean he can exploit employees. An unlimited contract is more flexible than a limited contract. But the gratuity calculation is greater in limited contract than unlimited contract.


Online Discussions become null and void when new rules are implemented. Therefore it is recommended that before taking legal action, please check with the licensed lawyers. They will guide the help seeker as per the latest Labour Law Rules.