UAE employment contracts: what must be included
Reviewed by Mellow Editorial Team, HR & payroll content team
UAE employment contracts must include a defined set of terms under Federal Decree-Law No. 33/2021. Missing or poorly drafted clauses expose both the employer and employee to disputes — and the Ministry of Human Resources and Emiratisation (MOHRE) can reject contracts that do not meet minimum requirements.
What the law requires
Federal Decree-Law No. 33/2021 (the UAE Labour Law) governs private sector employment. Every employment contract must be written, in Arabic, and registered with MOHRE. A translation into the employee's language is good practice but the Arabic version is the legally binding one.
The contract must cover, at minimum:
- Employer name, legal address and trade licence details
- Employee name, nationality, job title and qualifications
- Date of joining and work location
- Contract duration (fixed-term or unlimited)
- Agreed probation period, if any — capped at six months by law
- Basic wage, allowances and payment frequency
- Working hours
- Leave entitlements
- Notice period for termination
- Reference to the applicable MOHRE job category or occupational classification
If the contract is silent on any of these points, MOHRE and UAE courts will apply statutory defaults — which may not align with what either party intended.
Fixed-term vs unlimited contracts
Since the 2021 law came into force, all new private sector contracts must technically be fixed-term. The law removed the old unlimited-term category for new agreements, though many employers and employees still use the phrase informally.
In practice, fixed-term contracts are commonly set at two or three years and can be renewed. The important point is that the end date must appear in the contract. If you roll over a contract without issuing a formal renewal or new agreement, you risk ambiguity about the employee's terms and the validity of any updated clauses.
Probation clauses
Probation can be up to six months. During this period either side can terminate with shorter notice — the law sets out specific minimum notice requirements for probation exits, which differ depending on whether the employee is leaving voluntarily or being dismissed, and whether they are leaving the UAE entirely.
One common mistake: drafting a probation clause but failing to specify the notice required during that period. A vague clause ("probation may be ended at any time") is unlikely to hold up if challenged.
Wage and allowance structure
The contract should state the basic wage separately from allowances. This matters because gratuity is calculated on basic wage alone. Expatriate employees accrue end-of-service gratuity at 21 days' basic wage per year for the first five years of service, and 30 days' per year after that, capped at two years' total pay.
Lumping basic wage and allowances into a single "salary" figure creates problems at the end of employment when the gratuity calculation is disputed. Be explicit: state the basic wage, then list each allowance (housing, transport, other) as a separate line.
All wages must be paid through the Wage Protection System (WPS), which requires salaries to be transferred via an approved financial institution on the agreed pay date. The contract should confirm the payment frequency — monthly is standard in the UAE.
Leave and working hours
The statutory minimum annual leave is 30 calendar days once an employee has completed one year of service. Employees in their first year accrue leave on a pro-rata basis. The contract can grant more than 30 days but not less.
Working hours should be stated clearly. Standard hours under UAE law are eight hours per day or 48 hours per week. Reduced hours apply during Ramadan. If an employee's role regularly requires overtime, the contract should acknowledge this and reference the statutory overtime rate.
Non-competition and confidentiality clauses
These clauses are permitted but must be reasonable in scope, geography and duration. A non-compete that covers every industry worldwide for five years is unlikely to be enforceable. Courts will look at whether the restrictions genuinely protect a legitimate business interest.
Confidentiality obligations survive termination by their nature, but it is worth spelling this out explicitly in the contract rather than assuming it is implied.
Practical steps before issuing a contract
Check that the contract template matches the employee's MOHRE-registered job category. Run the Arabic version past a qualified UAE employment lawyer before use — a one-time review of your standard template is more cost-effective than defending a dispute later.
Keep signed copies accessible: both parties should hold a copy, and MOHRE registration records should be retained throughout employment and for a reasonable period after it ends. If you manage payroll for employees across multiple jurisdictions, aligning contract terms with payroll records is worth building into your onboarding process — how Mellow runs payroll across six countries explains how that coordination works in practice.
This article is general information only and does not constitute legal advice. For advice on your specific situation, consult a qualified UAE employment lawyer.
---
Run HR and payroll in UAE with Mellow
Mellow brings HR, payroll and 12 AI agents into one platform — built to handle UAE properly, with payroll included, from £4 per employee per month. The AI agents don't just answer questions; they generate contracts, run cost estimates and draft letters for you.
[Start a free trial →](/register)