Draft Employment Contract Uae

Employment Contract — UAE Federal Onshore

When to use this

Use this skill to draft an employment contract for an employee working for a UAE mainland (onshore) employer registered with the Department of Economic Development (DED) or equivalent emirate authority. Governing law: Federal Decree-Law No. 33/2021 on the Regulation of Labour Relations (and its implementing Cabinet Decisions), which replaced the prior Federal Law No. 8/1980.

Critical scoping rule: Federal Decree-Law 33/2021 applies to onshore UAE employers only. If the employer is registered in:

• DIFC: DIFC Employment Law (DIFC Law 4/2021) applies — use a separate DIFC contract.
• ADGM: ADGM Employment Regulations 2024 apply — use a separate ADGM contract.
• Other free zones (DMCC, JAFZA, Sharjah, etc.): federal law generally applies unless the free-zone authority has issued specific employment regulations.

Always identify the employer's registration to determine the correct regime before drafting.

Required inputs

Key structural rules under Federal Decree-Law 33/2021

Definite-term contracts only

Federal Decree-Law 33/2021 abolished indefinite-term contracts for onshore UAE employment. All contracts must be definite-term with a maximum initial term of 3 years. Contracts are renewable; there is no limit on number of renewals.

Failure to convert pre-2022 indefinite contracts to definite terms (deadline was February 2023) means the contract is governed by the new law but treated as if it were a renewable 3-year contract.

MOHRE standard form

All employment contracts must be in the MOHRE standard electronic form and registered on the MOHRE portal. The standard form has fixed fields; additional provisions may be attached as an "Additional Terms" appendix but must not contradict the standard form.

Work permit and residence visa

Onshore employment is conditional on:

• MOHRE work permit issuance.
• GDRFA (General Directorate of Residency and Foreigners Affairs) residence visa.

Include: "This employment is conditional on the Employee holding and maintaining valid MOHRE work authorization and UAE residence visa. The Employer shall facilitate sponsorship; the Employee is responsible for compliance with immigration law."

Mandatory provisions

Working hours

• Maximum: 8 hours per day / 48 hours per week.
• Reduced during Ramadan: for Muslim employees, working hours are reduced by 2 hours per day.
• Overtime: permitted beyond limits; minimum overtime rate of 1.25× regular hourly rate; 1.5× for overtime worked between 9 pm and 4 am.

Annual leave

• 30 calendar days per year after completing one full year of service.
• Pro-rated for first year and on termination.
• Employer may schedule leave; employee may request leave timing.
• Leave pay must be paid before the employee takes leave.

Sick leave (Article 31)

After probation:

• First 15 days: full pay.
• Next 30 days: half pay.
• Subsequent sick leave: unpaid. Total entitlement: 45 days per year.

Maternity / paternity leave

• Maternity: 60 working days (45 days full pay + 15 days half pay).
• Paternity: 5 working days within the first 6 months after birth.

End-of-Service Gratuity (EOSG)

EOSG calculation:

• First 5 years: 21 calendar days' basic salary per year of service.
• 6th year onwards: 30 calendar days' basic salary per year of service.
• Pro-rated for fractions of a year.

Critical: EOSG is calculated on basic salary only — housing, transport, and other allowances are excluded. This is the opposite of KSA (where EOSA is on total salary).

Maximum EOSG = 2 years' basic salary (cap under federal law).

EOSG is payable on termination regardless of who terminates, but not during probation. If employee resigns within the first year, no EOSG is earned.

Probation period

• Maximum: 6 months (increased from 3 months under the prior law).
• During probation: either party may terminate with 14 days' notice (employer) or 1 month's notice (employee moving to another UAE employer) or 14 days' notice (employee moving outside UAE).
• No EOSG earned during probation if terminated.

Notice period

• Minimum 30 days; maximum 90 days as agreed in the contract.
• Pay-in-lieu of notice is permitted.
• If employee resigns without providing proper notice, employer may deduct notice-period salary.

Salary structure

Federal law requires the salary to be stated in the MOHRE form with breakdown:

Total remuneration = all components. State all amounts in AED.

For expatriate senior employees with USD/GBP-denominated contracts: specify the exchange rate mechanism; the MOHRE requires AED equivalent on registration.

Non-compete (Cabinet Decision 1/2022)

Federal Decree-Law 33/2021 and Cabinet Decision 1/2022 permit non-compete clauses with:

• Duration: maximum 2 years post-termination.
• Geographic scope: must be reasonable relative to the employee's actual work.
• Activity scope: limited to activities that genuinely compete with the employer's business.
• No statutory compensation requirement (unlike some jurisdictions) — but courts may refuse to enforce an overly broad clause.

Post-2022, UAE courts have become more willing to enforce reasonable non-competes; conversely, overbroad clauses (national blanket, multi-year, all-industry) are routinely declared invalid.

DIFC and ADGM — completely separate regimes

Do not use this skill for DIFC or ADGM employees. These free zones have their own employment laws that differ materially from the federal law:

Document structure

1. Employer details (بيانات صاحب العمل) — legal name, TRN, trade license, address.
2. Employee details (بيانات العامل) — name, nationality, passport, position.
3. Contract type and term (نوع العقد ومدته) — definite; start and end date; renewal mechanism.
4. Probation period (فترة التجربة) — duration; termination notice during probation.
5. Place of work (مكان العمل).
6. Working hours (ساعات العمل).
7. Salary (الراتب) — itemized breakdown; currency AED; payment date.
8. Annual leave (الإجازة السنوية).
9. Sick leave (الإجازة المرضية).
10. Maternity/paternity leave (إجازة الأمومة/الأبوة).
11. EOSG statement (مكافأة نهاية الخدمة) — statutory entitlement stated; calculation methodology.
12. Notice period (مدة الإشعار).
13. Non-compete (شرط عدم المنافسة) — if applicable.
14. Confidentiality and IP (السرية والملكية الفكرية).
15. Work permit and residency (تصريح العمل والإقامة).
16. Governing law (القانون الحاكم) — Federal Decree-Law 33/2021.
17. Signatures (التوقيعات) — bilingual; date.

Common mistakes

1. Drafting indefinite-term contracts — abolished under Federal Decree-Law 33/2021; MOHRE will not register them.
2. EOSG calculated on total salary — federal law uses basic salary only; including allowances overstates liability.
3. Probation period set at 3 months — maximum is 6 months; using 3 months is valid but unnecessarily short for senior roles.
4. DIFC/ADGM employment governed by federal law — wrong regime; entirely different law and courts apply.
5. Non-compete scope too broad — Cabinet Decision 1/2022 parameters apply; national blanket clauses are challengeable.
6. Missing work-permit condition — if work permit is not issued, the contract has no legal basis; the condition must be explicit.

Related skills

• [[draft-employee-handbook]] — workplace policies document supplementing the contract
• [[kb-employment-law-uae]] — UAE labor law reference pack with statutory thresholds and Cabinet Decisions
• [[draft-employment-contract-ksa]] — KSA employment contract
• [[draft-employment-contract-lb]] — Lebanese employment contract