Overview
The UAE Labour Law (2025 Edition) under Federal Decree Law No. 33 of 2021 (as amended) outlines five main types of employment contracts that govern how companies and employees work together in the Emirates. Whether you are an employer, HR manager (at firms like MaxHR), or a foreign worker seeking clarity on contract terms, understanding these categories is essential to ensure compliance and fair employment practices.
What Are the Main Employment Contract Types Under UAE Labour Law 2025?
Below is a direct summary of the five approved contract types recognized by the Ministry of Human Resources and Emiratization (MOHRE). These apply across private sector entities registered in the UAE’s mainland and most free zones.
| Contract Type | Duration / Renewal | Notice Period | Typical Use Case | Key Feature |
|---|---|---|---|---|
| 1. Limited Term Contract | Up to 3 years (max), renewable upon agreement | 30 – 90 days | Project-based or fixed roles | Automatically expires unless renewed in writing |
| 2. Unlimited Term Contract (Transitional) | Phased out by 2025 but still valid until converted | 30 – 90 days | Legacy employees pre-2022 law | Must be converted to limited by end of 2025 |
| 3. Part-Time Contract | Ongoing or renewable annually | 7 – 30 days | Freelancers, students, consultants | Multiple employers allowed with MOHRE approval |
| 4. Temporary Contract | ≤ 6 months | 7 – 14 days | Short-term projects or events | Ends automatically after project completion |
| 5. Flexible Work Contract (Remote / Hybrid) | Defined by mutual agreement | 7 – 30 days | Remote roles, gig or digital jobs | Hours and location can vary under mutual consent |
Source: MOHRE Circular No. 2/2024 & UAE Cabinet Resolution No. 27 of 2023.
Limited Term Employment Contracts
Direct Answer: Under UAE Labour Law, a limited contract lasts up to three years and automatically ends unless both parties renew it. This is the default format for all private sector jobs in 2025.
Why it matters: It offers clear start and end dates and predictable termination clauses, reducing disputes. For HR systems such as MaxHR, automation of renewal notifications is key for compliance tracking.
Unlimited Term Contracts (Transitional Phase)
Although these were common before 2022, they must be converted to limited contracts by December 2025. Employers still using them must issue new MOHRE-approved limited forms to avoid penalties.
Key difference: Unlimited contracts allow termination “for a valid reason” with notice, whereas limited contracts end upon expiry or mutual termination.
Part-Time Employment Contracts
The part-time model supports gig-based and multirole workers — students, freelancers, and specialists who serve more than one employer.
Regulation highlights:
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Employees can legally work for two or more entities if approved by MOHRE.
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Entitled to pro-rated annual leave and end-of-service benefits.
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Digital platforms such as MaxHR help employers calculate multi-job entitlements accurately.
Temporary Employment Contracts
Best for seasonal projects or short missions lasting under six months.
Example: Event management for Expo projects or construction milestones.
Termination occurs automatically at the end of the specified term, and gratuity is calculated proportionally if service exceeds one year of cumulative employment.
Flexible / Remote Work Contracts
Introduced in response to the post-COVID shift, the 2025 Labour Law formally recognizes flexible, hybrid, and remote work arrangements.
Features include:
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Variable hours and location based on agreement.
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Equal protection for salary, leave, and end-of-service benefits.
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Employers must provide digital tools and secure remote access systems.
Pro Tip: Companies using MaxHR or similar platforms can track attendance and productivity while staying legally compliant with UAE remote-work standards.
Why Knowing Your Contract Type Matters
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Determines your termination rights, gratuity, and leave entitlements.
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Impacts your eligibility for labour dispute claims before MOHRE.
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Helps employers maintain accurate records for labour inspection audits.
Key Stat Snapshot (2025 Trends)
| Metric | Private Sector (%) | Free Zone (%) | Change vs 2024 |
|---|---|---|---|
| Limited Contracts Adoption | 82 % | 74 % | +12 % |
| Part-Time Contracts | 9 % | 15 % | +6 % |
| Remote / Flexible Contracts | 6 % | 8 % | +4 % |
| Temporary Projects | 3 % | 3 % | Stable |
Data Source: UAE MOHRE Labour Market Insights Q2 2025
Compliance Checklist for Employers (2025)
✅ Use only MOHRE-approved contract templates.
✅ Convert legacy unlimited contracts by Dec 2025.
✅ Include clear clauses on working hours, salary, leave, and gratuity.
✅ Submit all contracts digitally via the MOHRE portal or authorized HR systems (e.g., MaxHR).
✅ Maintain a “Last Updated 2025” stamp on offer letters for audit readiness.
Conclusion
Understanding the five contract types defined under the UAE Labour Law 2025 ensures legal compliance and better employer-employee transparency. As the labour market evolves toward flexibility and digital tracking, businesses that embrace updated contract models and automated HR tools like MaxHR gain a competitive edge in retaining talent and avoiding penalties.
FAQs on UAE Labour Law Employment Contracts (2025)
1. What is the maximum duration of a limited term contract in the UAE?
Up to three years, renewable upon mutual agreement between employer and employee.
2. Are unlimited contracts still legal in 2025?
They remain valid temporarily but must be converted to limited contracts by December 2025 under MOHRE guidelines.
3. Can I work for two companies at the same time?
Yes, through a MOHRE-approved part-time work permit that allows dual employment without violating labour laws.
4. What benefits apply to remote or flexible workers?
They receive the same entitlements — annual leave, public holidays, and end-of-service gratuity — as onsite employees.
5. Where can employers verify contract formats or updates?
Through the MOHRE official portal or trusted HR compliance systems like MaxHR that sync with government databases.
Last Updated October, 25
