Quick answer
Master uae employment contract requirements: MoHRE rules, probation, notice, gratuity and non-compete clauses explained for founders. Hire with confidence.
The core uae employment contract requirements are clear: every private sector contract must be written, registered electronically with the Ministry of Human Resources and Emiratisation (MoHRE), issued as a fixed-term agreement, and paid through the Wage Protection System (WPS). Get those four elements right and you have a compliant foundation. Get them wrong and you risk fines, blocked work permits, and unenforceable terms. Therefore, this guide walks founders and SMBs through what a UAE contract must contain, how probation and notice work, how end-of-service gratuity is calculated, and where non-compete clauses stand.
Key Takeaways
- All mainland MoHRE contracts are now fixed-term; the old limited vs unlimited distinction was abolished under the New Labour Law.
- Probation cannot exceed 6 months under Article 9, and any clause extending it is void.
- The minimum post-probation notice period is 30 calendar days under Article 43, for both resignations and terminations.
- Gratuity is 21 days’ basic salary per year for the first five years and 30 days per year thereafter, capped at two years’ pay.
- Non-compete restrictions are valid only when limited in time, place, and nature of work, with a maximum of two years from contract expiry.
What the law says and what a UAE employment contract must contain
Federal Decree-Law No. 33 of 2021 governs private sector employment across the UAE mainland. The Ministry of Human Resources and Emiratisation (MoHRE) implements, oversees, and enforces this law and its executive regulations.
Importantly, the law applies to private sector employees, both nationals and expatriates. However, federal and local government staff, the military, police, and domestic workers fall under separate regimes. Free zone authorities such as DIFC and ADGM also run their own employment frameworks, so always confirm which rulebook applies to your entity.
The mandatory contract clauses
Under the law, a compliant contract must state several details. First, it needs the employer name and address plus the employee’s identity details and qualifications.
Next, it must record the occupation, start date, place and hours of work, rest days, and the probationary period if one applies. Furthermore, it must set out contract duration, the agreed wage including allowances, annual leave duration, notice period, and termination modalities.
Because these terms shape every dispute that follows, precise drafting matters. Our team handles Legal Document Drafting UAE so contracts stay clear, enforceable, and ready for MoHRE registration. You can also add new clauses to the approved contract forms, provided they remain compatible with the Decree Law and its regulations.
Registration and the Wage Protection System
Contracts must be written and registered electronically with MoHRE. In addition, all salaries must flow through the Wage Protection System, reflecting the exact amounts in the registered contract.
Consequently, your offer letter, your MoHRE contract, and your WPS payment must all match. Mismatches are a common trigger for complaints, so reconcile them before the first payroll run.
Fixed-term contracts, probation, and notice: the rules that trip founders up
One of the biggest shifts in the law affects contract structure. The New Labour Law abolished the limited versus unlimited term distinction, so all mainland MoHRE contracts are now fixed-term contracts.
How long can a fixed-term contract run?
Article 8(3) originally capped contract terms at three years. However, MoHRE’s media statement of 7 October 2022 announced amendments removing the statutory maximum duration, while still requiring a definite term.
As a result, you can now set longer terms, but you cannot leave the duration open-ended. Notably, if a fixed-term contract is not renewed at expiry yet both parties keep performing, the contract is considered renewed on the same terms. MoHRE also required employers to convert legacy unlimited-term contracts, with the deadline extended to 31 December 2023.
Probation period limits
Under Article 9, the probation period may not exceed 6 months. Moreover, it cannot be extended for another term even by mutual agreement, and any extending clause is void.
- To terminate during probation, an employer must give at least 14 days’ prior written notice.
- If an employee moves to another UAE employer during probation, they give one month’s notice, and the new employer compensates the original for recruitment costs unless agreed otherwise.
- An employee leaving the UAE during probation must give 14 days’ notice; leaving without notice may lead MoHRE to deny a new work permit for one year from departure.
Finally, once an employee completes probation for a role, you cannot require a fresh probation for a different role, and that period counts toward total service for gratuity.
Notice periods after probation
The minimum notice period after probation is 30 calendar days under Article 43. This applies to both resignations and terminations, while contractual notice typically ranges from 30 to 90 days.
During the notice period, the employee is entitled to one unpaid day per week to search for a new job. In contrast, summary dismissal without notice is permitted only for defined serious misconduct under Article 44, such as fraud, assault, intoxication at work, causing significant financial damage, and repeated safety violations. For grey-area exits, our legal consultation team helps you document the process defensibly.
End-of-service gratuity, leave, and protected terms
Gratuity is often the single largest end-of-employment cost, so plan for it from day one.
How gratuity is calculated
End-of-service gratuity under Article 51 requires at least one continuous year of service with the same employer. After that, the calculation is straightforward.
| Service length | Gratuity accrual | Basis |
|---|---|---|
| Less than 1 year | No gratuity | Not eligible |
| First 5 years | 21 days’ pay per year | Basic salary only |
| After 5 years | 30 days’ pay per year | Basic salary only |
| Overall cap | Maximum two years’ pay | Basic salary only |
Crucially, under Federal Decree-Law No. 33 of 2021, employees who resign voluntarily receive the same gratuity calculation as those terminated by the employer. So resignation no longer reduces the payout the way older rules implied.
Employers must pay gratuity and all end-of-service entitlements within 14 days of contract end, or face MoHRE complaints and court referrals. Meanwhile, UAE nationals fall outside standard gratuity rules and sit under pension and social security legislation administered by the GPSSA. As of 2026, employers can also opt into a Voluntary Alternative End of Service Benefits Scheme established under Cabinet Resolution No. 96 of 2023, an employer-funded savings model.
Working hours and leave
Normal working hours are 8 hours a day or 48 hours a week. The law also recognises six work models: full-time, part-time, temporary, flexible, remote, and job-sharing, which gives growing teams useful flexibility.
- Annual leave: 30 calendar days after one year of continuous service; 2 days per month for those with 6 to 12 months of service (Article 29).
- Maternity leave: 60 days total, with 45 days at full pay and 15 days at half pay.
Non-compete clauses and changing terms
Under Article 10, non-compete restrictions must protect legitimate business interests and stay defined in time, place, and nature of work, with a maximum restrictive period of two years from contract expiry. Therefore, blanket bans rarely hold up.
Similarly, employers cannot unilaterally change material terms such as salary, job title, or working hours; those changes require the employee’s written consent. When you restructure roles or scale headcount, align contracts with your wider corporate structuring so the paperwork keeps pace with the business.
Frequently Asked Questions
What law governs employment contracts in the UAE mainland?
Federal Decree-Law No. 33 of 2021 governs private sector employment on the UAE mainland, implemented and enforced by MoHRE. It covers nationals and expatriates, although government staff, the military, police, and domestic workers fall under separate regimes, and free zones such as DIFC and ADGM apply their own frameworks.
Is there still a difference between limited and unlimited contracts in the UAE?
No, the New Labour Law abolished the limited versus unlimited distinction, and all mainland MoHRE contracts are now fixed-term. Employers had to convert legacy unlimited contracts by the extended deadline of 31 December 2023. A definite term is still required, even though the statutory maximum duration was removed in 2022.
What information must a UAE employment contract legally contain?
A UAE employment contract must state the employer and employee details, qualifications, occupation, start date, place and hours of work, rest days, probation period if any, contract duration, agreed wage including allowances, annual leave, notice period, and termination modalities. It must be written, registered electronically with MoHRE, and paid through the Wage Protection System.
How long can a probation period be under UAE labour law?
A probation period cannot exceed 6 months under Article 9, and it cannot be extended even by mutual agreement. Any clause attempting to extend probation is void. During probation, an employer must give at least 14 days’ written notice to terminate.
How is end-of-service gratuity calculated, and do I lose it if I resign?
Gratuity is 21 days’ basic salary per year for the first five years and 30 days per year thereafter, capped at two years’ pay and based on basic salary only. You do not lose it by resigning: under Federal Decree-Law No. 33 of 2021, voluntary resignation earns the same gratuity calculation as employer termination, provided you complete at least one continuous year of service.
Are non-compete clauses enforceable in UAE employment contracts?
Non-compete clauses are enforceable only when they protect legitimate business interests and stay defined in time, place, and nature of work, with a maximum restrictive period of two years from contract expiry under Article 10. Overly broad or open-ended restrictions are unlikely to be upheld.
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or regulatory advice. Rules and fees in the UAE change frequently. Before acting on anything you read here, speak to a qualified advisor — we are happy to help.