UAE Labour & Employment Contract Drafting — What to Get Right Before You Start
Labour & Employment Contract Drafting Advisory is the discipline of drafting, reviewing, and maintaining UAE employment contracts and HR policy documents so they are fully aligned with Federal Decree-Law No. 33 of 2021 (the UAE Labour Law), its executive regulations, and the specific rules of the free zone or mainland jurisdiction under which each employee is licensed. A contract that merely 'looks standard' is not the same as one that survives a MOHRE dispute, correctly computes end-of-service gratuity, and protects the employer's position on probation, non-compete, and termination.
What This Actually Covers
Labour & Employment Contract Drafting Advisory covers the preparation, review, and ongoing update of the full suite of documents that govern the employer-employee relationship in the UAE — the unlimited-term employment contract required under the Labour Law, offer letters, probation clauses, job descriptions, non-compete and confidentiality undertakings, secondment and intercompany transfer agreements, termination and settlement documentation, and the internal HR policies (leave, disciplinary, remote work, end-of-service) that sit alongside the contract itself. Since Federal Decree-Law No. 33 of 2021 came into force on 2 February 2022, all new UAE private-sector employment contracts are unlimited-term contracts — fixed-term contracts capped at three years, renewable by mutual agreement — and every contract must be registered with the Ministry of Human Resources and Emiratisation (MOHRE) for mainland employment, or with the relevant free zone authority for employees licensed under a free zone entity (DIFC and ADGM operate their own distinct employment regulations, separate from both MOHRE and the standard free zone framework).
For the full scope, current process and what PNPC includes, see the dedicated UAE Labour & Employment Contract Drafting service page.
Is This Relevant to Your Business?
- You are hiring your first employee in the UAE — mainland or free zone — and need a Labour Law-compliant unlimited-term contract, offer letter, and job description drafted before the employee's work permit and visa process begins
- Your existing employment contracts were adapted from an overseas template, drafted years ago under the pre-2022 limited/unlimited contract regime, or drafted without CA/HR input, and need to be reviewed and brought into line with Federal Decree-Law No.
- You need standard-form templates — employment contract, offer letter, probation letter, warning letter, termination letter, settlement agreement — built once and reused consistently across your UAE workforce, rather than drafted ad hoc for each hire
- You are seconding or transferring an employee between a UAE entity and an India (or other overseas) group entity and need the secondment agreement, dual-employment structure, or intercompany deputation documentation to hold up in both jurisdictions
Before You Assume You Need This
- You need ongoing monthly WPS payroll processing and salary disbursement — that is the Payroll Processing engagement; contract drafting is typically the first step, with payroll processing running alongside it as an ongoing retainer
- You need end-of-service gratuity or leave balances actually computed and disbursed for a specific departing employee this month — that is a payroll execution task; PNPC's payroll team handles the calculation, contract advisory ensures the underlying policy and contract terms are correct
- You are already in active, contested litigation before the MOHRE or a UAE court over an existing employment dispute — that requires UAE-licensed litigation counsel; PNPC can support with documentation, computation evidence, and coordination, but does not appear as courtroom counsel
Questions We're Actually Asked
What is the difference between a limited and unlimited employment contract under current UAE law?
Since Federal Decree-Law No. 33 of 2021 came into force on 2 February 2022, the old distinction between 'limited' and 'unlimited' contracts was replaced with a single standard: all private-sector employment contracts are now unlimited-term contracts, with a fixed-term option capped at a maximum of three years and renewable by mutual agreement. Employers still operating on the pre-2022 contract format need those contracts reviewed and converted.
Is a written employment contract legally required in the UAE?
Yes. Federal Decree-Law No. 33 of 2021 requires every employment relationship to be documented in a written contract, and mainland employers must register that contract with MOHRE (free zone employers register through their free zone authority, with DIFC and ADGM operating their own distinct employment regulation frameworks). A verbal-only arrangement, or an unregistered contract, leaves both employer and employee without the clear documentary record that a MOHRE dispute resolution process relies on.
How is end-of-service gratuity calculated in the UAE?
Under Article 51 of Federal Decree-Law No. 33 of 2021, an employee who completes one year or more of continuous service is entitled to end-of-service gratuity calculated on the basic salary (excluding allowances) at 21 days' basic salary for each of the first five years of service, and 30 days' basic salary for each year of service beyond five years, pro-rated for partial years, up to a cap of two years' total salary. The calculation applies to both resignation and termination scenarios, subject to specific provisions that may affect entitlement in cases of termination for cause.
Getting This Right From the Start
If your UAE employment contracts were drafted from a template, drafted years ago, or drafted without reference to how your payroll actually runs, talk to PNPC's Dubai team before your next hire, exit, or MOHRE query tests whether they hold up. We draft contracts as part of the same practice that runs your WPS payroll and computes your gratuity liability — so the paper and the payroll always agree.
PNPC Global has advised Dubai businesses since 1986. Explore the full Accounting, Payroll, CFO & E-Invoicing practice for related services, or go straight to the UAE Labour & Employment Contract Drafting page for specifics.
Rates, thresholds and filing dates are set by the relevant authority and revised periodically. Treat anything numeric here as "ask PNPC for the current figure," not as a quoted fact.