Employers should also consider the unique risks of hiring temporary contractors, especially if these temporary employees live abroad. Open-ended contracts are generally considered to be more flexible and user-friendly than fixed-term contracts. For this reason, a contract of indefinite duration is more commonly used in the United Arab Emirates than a contract of limited duration. It can be used for employees who are supposed to be permanent and do not do project work (if the duration of the project is known in advance). 2. The employee or employer may terminate or terminate the employment contract with 30 days` notice. An extension of the notice period is also possible if both parties mutually agree to an extension of the notice period. There is a good chance that you will offer new international employees one of two types of employment contracts: fixed-term or open-ended. For fixed-term or fixed-term contracts, contracts should generally include the following elements to avoid misclassification and general labour law laws: The most common type of contract used by employers are contracts of indefinite duration.

However, this does not mean that contracts of indefinite duration are always more advantageous than fixed-term contracts. Under the United Arab Emirates Labour Code No. 8 of 1980 (as amended) (the “UAE Labour Code”), which applies to all employers in the United Arab Emirates (with the exception of those established at the Dubai International Financial Centre (“DIFC”), there are two types of employment contracts that employers can issue to employees; fixed-term or open-ended contracts. Under the UAE Labor Code, there are two main ways for an employer to legally terminate a contract of indefinite duration: Similarly, there are unique challenges for open-ended employment contracts, especially when hiring globally. Even if the employee is offered a new fixed-term contract at the end of the initial contractual period, there is a risk that a court will find that the employment relationship is legally indeterminate, which will invalidate the fixed-term contract(s). These contracts are accepted when an employer needs to hire employees for certain projects or a certain duration. At Globalization Partners, our comprehensive solution is ready to help you hire top talent in 187 countries, without months of research on country-specific labor laws, contract design, legal requirements, claims, and more. Given the above risk, hiring an employee on the basis of a contract of indefinite duration with a clear termination clause is often more advantageous. Temporary contractors can be a cost-effective and risk-averse solution in the following circumstances: There are many advantages to using short-term contractors as part of an international expansion.

In general, employment contracts fall into one of two categories: checklist of elements to be included in a contract of indefinite duration. 3. The employer must pay the employee`s wages or salaries no later than the notice period. Fixed-term contracts are useful when an employer needs to hire employees for specific projects and the duration of those projects is known in advance. According to Federal Law No. 8 of 1980 on the Regulation of Industrial Relations and its Amendments (`the Labour Law of the United Arab Emirates`) may be employment contracts of two types of `fixed-term contracts` and `contracts of indefinite duration`. As the name suggests, fixed-term contracts are set for a certain duration, while open-ended contracts are of indefinite duration and do not specify or terminate a duration. If an employer terminates an employee`s employment relationship without giving reasons, he is required to inform the employee of the dismissal or to pay in lieu of the dismissal. On the other hand, in addition to the reason set out in Article 113 of the UAE Labour Code, as stated above, an employee can legally terminate a fixed-term employment contract if: No legal provision regulates a formal “probationary period”. However, many employers have an internal policy on probationary periods, which are often referred to as “introductory periods” or “trial periods”. These internal policies are created based on the needs of a particular employer.

They usually provide for a formal performance evaluation after a period of employment initially declared (often ninety (90) days). Fixed-term contracts generally do not have a notice period and simply expire at the end of the term or on the date specified in the contract (unless they terminate them earlier by one of the parties – see answers to questions 5 and 6 below). Under the part-time contract, the original employer carries: If you have any questions about fixed-term or open-ended contracts, or if you have recently terminated the employment relationship or otherwise, we recommend that you contact us to discuss your options. Please contact Toronto Employment Lawyers, Sultan Lawyers, at 416-214-5111 or khayward@sultanlawyers.com. A fixed-term contract may, at the choice of the employer or employee, be mutually terminated in accordance with the above-mentioned provisions of Article 113; Or There are various differences between the two types of contracts, including the treatment of the legal right to tip at the end of the service period and the consequences of termination. For example, an international employee may initially have been recruited for one year via a fixed-term contract. At the end of the year, your organization is so impressed with their work that you decide to offer a contract extension, this time with even higher compensation, broader responsibilities, and additional benefits. Choosing the right type of contract at the beginning of each employment relationship is important to mitigate the risk.

Do you know the types of contracts available and the main differences? Understanding the differences between a fixed-term contract and a perpetual contract is critical to brand compliance, day-to-day operations, profitability, and overall reputation. Unless otherwise provided in the employment contract, if the employee wishes to terminate the fixed-term contract before the end of the period, the UAE Labour Code requires the employee to pay the employer an “early termination indemnity” equal to half of the three months` remuneration, including salary and allowances, or half the remuneration for the remaining period if the contract lasts less than three months. The part-time contract can only be converted into a regular contract at the end of the part-time employment contract. There are a large number of employment contracts that govern the employer-employee relationship. In the spectrum of varieties, there are two main types, namely (1) fixed-term contracts and (2) contracts of indefinite duration. While most contracts are permanent in nature, fixed-term contracts represent a significant number of existing agreements. Upon conclusion of the contract, an organization may choose to renew or extend the fixed-term contract. However, it must be careful in doing so. Many countries limit the frequency with which a fixed-term employment contract can be renewed, either by limiting the overall duration of a contract or by limiting the number of renewals – or both.

Except in the case of certain collective redundancies or as provided for in an employment contract or collective agreement, the law does not prescribe a formal “notice period” to terminate an individual employment relationship. Most employees are employed “at will” and either party may terminate the employment relationship without notice. Under the Worker Accommodation and Retraining Notice Act (“WARN Act”), employers must notify affected workers 60 days in advance of covered plant closures or mass layoffs. Ultimately, the employer should have documents to convince a court that the contract was not simply an attempt to avoid the legal obligations that would arise if the contract were indeterminate. Private and public organizations use fixed-term and open-ended contracts based on current needs, budgets, staffing capacity and business priorities. However, to determine the best type of employment contract, you also need to consider your risk tolerance to properly classify employees through contracts and whether you have appropriate legal counsel to help you navigate this new contractual terrain. · If the period of service is longer than five years, there is no shortening. Following recent reforms of the UAE`s labour market, fixed-term contracts have a maximum duration of 2 years, compared to 4 years previously. .