• Unlimited term contracts- These contracts continue to be in full force and effect unless and until terminated;
• Fixed term contracts- These contracts terminate at the end of the agreed term, unless renewed by the parties.

It provides for only one form of contract i.e., Fixed term contracts thereby abolishing unlimited term contracts. As per the law, the employment contract is to be concluded for a specific term not exceeding (3) three years. Further, it is permissible, by agreement of both parties, to extend or renew this contract for another similar term or for a shorter term, for once or more. If the contract is neither renewed nor extended, but the parties continue to operate as though the contract is still in effect, the contract is deemed as renewed on the same terms and conditions as were set out in the most recent version.

For employees currently on unlimited term contracts, the provisions of the law will automatically apply following the Effective Date.

Employers are required to convert existing unlimited term contracts into fixed term contracts within one year from the Effective Date (i.e., by February 1, 2023).

While the maximum period of probation remains six months, a minimum notice period of 14 days for employers wishing to terminate an employee whilst on probation has been introduced. The law has also introduced the provision of termination by the employee during the probation period.

Where an employee resigns from employment during their probationary period, the law introduces various obligations. Where the resignation:

Is to join another employer in the UAE, the employee must provide a minimum of one months’ notice and the new employer is obligated to compensate the current employer for the employee’s recruitment costs incurred (unless agreed otherwise).

Is to leave the UAE, the employee must provide 14 days’ notice. However, if the employee returns to the UAE for the purposes of employment within three months of their departure, the new employer will be liable to compensate the previous employer for the employee’s recruitment costs they had previously incurred (unless agreed otherwise).

A working woman was entitled to maternity leave with full pay for a period of forty-five days including the time before and after delivery, provided that her continuous period of service with the employer should not be less than a year, but if a working woman has not completed the said period, the maternity leave shall be with half pay.

Further a working woman, on the expiry of the maternity leave, was entitled to discontinue work without pay for a maximum period of one hundred consecutive or intermittent days if such absence was due to illness which does not enable her to resume work.

Maternity leave has been increased to sixty calendar days. The first forty-five days are fully paid, with the remaining 15 days at half pay. Maternity pay is not reduced in the event that the employee has not completed one full year of employment at the time of availing maternity leave. Maternity leave also applies in circumstances where an employee miscarries after 6 months of carrying, still births and/or upon the death of an infant after birth. An additional thirty calendar days of maternity leave (with full pay), for employees who give birth to a disabled or sick child whose health conditions require a “constant companion” is available which can be further extended for an additional thirty days (unpaid).