For decades UAE employers could offer two kinds of contract. The current Labour Law keeps only one of them. Knowing which you have tells you how your notice and gratuity are worked out.
Limited contract
A limited, or fixed-term, contract has a start date and an end date. It can be renewed or extended by agreement, and if both sides simply carry on working after it expires, it is treated as renewed on the same terms. All contracts issued under the current law are of this type.
Unlimited contract
An unlimited contract had no end date and continued until one side gave notice. It was available under the previous law, Federal Law No. 8 of 1980. Employers have since been required to convert these contracts to fixed-term ones.
The main differences
| Limited | Unlimited (older) | |
|---|---|---|
| End date | Yes, renewable | None |
| Available today | Yes | No longer issued |
| Ending it | Written notice of 30 to 90 days, for a legitimate reason | Written notice, usually 30 days or more |
| Gratuity on termination | Full scale | Full scale |
| Gratuity on resignation | Full scale under the current law | Reduced before five years under the older rules |
How gratuity works on each
On a limited contract, each of your first five years earns 21 days of basic salary and each later year earns 30 days. For older unlimited contracts, resigning before five years reduced the amount to one third or two thirds. Our guide to gratuity for unlimited contracts has the full table.
Renewals and continuous service
Renewing or extending your contract with the same employer does not restart the clock. Your service is counted as one continuous period from your first working day, and gratuity is calculated on the whole of it using your last basic salary.
How to check your contract type
Your registered contract is available through MOHRE's website and mobile app. Look for a contract end date. If there is one, your contract is fixed-term. See our guide to MOHRE enquiry services.
Frequently asked questions
Is there a maximum length for a fixed-term contract?
The contract runs for the period the employer and employee agree, and it can be renewed for similar or shorter periods.
Does my service restart when my contract is renewed?
No. Renewals and extensions with the same employer count as continuous service for gratuity.