5 Key Points to Consider When Drafting Employment Contracts in Dubai

An effective employment contract is pivotal in setting clear expectations and protecting the rights of the employer and employees working in Dubai, and helps in avoiding potential disputes. Additional care has to be taken while drafting these contracts because Dubai is a city that has a diverse workforce and a very unique legal landscape. As per the UAE Labour Law, mainly governed by Federal Decree-Law No. 33 of 2021, the rights and obligations of both employers and employees are basically decided.

Here are 5 key considerations when writing a Dubai employment contract:

1. Clear Definition of Employment Terms

• Job Title and Description: Clearly state the title of the job, role, and responsibilities. Try as much as possible not to use vague terminologies by giving a clear description of the job.
• Compensation and Benefits: Clearly state the basic salary, allowance, commissions, and performance-based incentives. Specify how often and in what form the payments shall be made. Also be clear about any deductions to be made during the employment term, such as taxes and social security. Outline the benefits package, including housing, transport, and medical, among other perks.
• Work Hours and Overtime: Define the type of employment, including the start and end time of work, any break periods involved, and shift patterns. State overtime rates and eligibility, along with the methods of calculation.
• Leave Entitlement: Mention about the entitlement to regular and public holidays, sick leave, maternity/paternity leave, and other leave types, together with eligibility criteria and duration of this type of leave. State whether such leave is cumulative and at what rate.
• Probationary Period: Define the probationary period with conditions leading up to its confirmation clearly stated. Outline expectations of performance and appraisal criteria within this period.

2. Confidentiality and Non-Compete Clauses

It is very crucial to have the protection of your business interests. Consider the following:

• Confidentiality: Specify what information is to be treated as confidential. This includes trade secrets, customer data, and any other proprietary information. Outline how this information shall be handled during employment and thereafter.
• Non-Compete: Add an appropriate non-compete clause, if necessary, for the protection of your business interests. Make sure to specifically mention it and not in contravention of Dubai Labor Law.

3. Termination and Notice Period

• Grounds of Termination: Clearly mention the grounds of termination, whether by way of resignation, dismissal with cause, or redundancy. Explain how termination shall proceed, its notice periods, and documentary requirements.
• Notice Period: State the duration of notice that shall be given by the employer or the employee if the employment is to be terminated. If need be, have separate periods for probationary and permanent staff.
• Severance Pay: State under what conditions the employee shall be entitled to severance pay. Using provisions of the UAE Labour Law, detail how an employer shall serve his employee with regard to severance pay.

4. Dispute Resolution

Including a dispute resolution clause can help streamline the process if disagreements arise. Consider the following:

• Dispute Resolution Mechanism: Clearly state the preferred mode of dispute resolution, whether mediation, arbitration, or litigation. Outline the procedures and applicable rules.
• Governing Law: Specify the governing law for the contract, which is Dubai’s labor law.

5. Compliance with UAE Labor Law

Ensuring compliance with UAE Labor Law is crucial to avoid litigation. Make sure your contract includes:

• All Essential Terms: A contract should stipulate all mandatory terms under UAE Labour Law, including the period of the contract, salary, leave, working hours, and termination provisions.
• Complies with Amendments: Stay informed about any amendments to UAE Labour Law and update your contract accordingly.
• Language: The contract should be provided in both English and Arabic, with both texts being identical.

Conclusion

An effective contract of employment in Dubai needs to state very clearly the legal requirements, specify in no ambiguous terms, the job expectations from the employee, give detailed information regarding compensation, include clauses relating to protective business interests, and stipulate a mechanism for the resolution of disputes. By ensuring that these areas are addressed, an employer will go a long way in developing a contract that will build a positive and productive employment relationship.

Need Expert Assistance?

An employment contract is a very important document under Dubai labor laws and, therefore, needs to be drafted with utmost care and attention. Notary Public Dubai drafting lawyers can provide proficient advice in making sure that your contract is in compliance with the law, covering all necessary protections and requirements.

Our well-experienced drafting lawyers at HHS Dubai Lawyers can assist in the following:

• Drafting customized contracts for your business.
• Comprehensive reviews to make sure that it complies with UAE Labor Law.
• Assessment of possible risks and liabilities.
• Use of plain language in contracts.
• Advice on dispute resolution.

Protect your business and your employees, and achieve legal soundness in your employment contracts to attain your company’s goals. Notary Public Dubai is here with its expert services for employment contracts.