Employment contract in the UAE: Template, Key Clauses and Local Law (2026)

What an employment contract is under UAE law An employment contract in the UAE for mainland (onshore) private-sector work is governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, often called the new UAE Labour Law, which took effect in February 2022, together with its Executive Regulations. It is administered by the Ministry of Human Resources and Emiratisation (MOHRE). One thing to settle first: the free zones are different. Financial free zones such as the DIFC in Dubai and the ADGM in Abu Dhabi have their own employment laws and their own courts, so a contract there follows those rules, not the federal law. This guide is about the mainland regime. The 2021 law changed the shape of UAE employment. The biggest change is that all employment contracts are now fixed-term (limited) contracts. The old unlimited contract was phased out, and existing ones had to be converted. A clear, compliant written contract registered with MOHRE is the foundation of a lawful hire. ## What local law requires Fixed-term contracts. Every contract is fixed-term, for a defined period, renewable by agreement. The term is commonly up to three years and can be renewed for similar or shorter periods; renewed service counts as continuous for end-of-service purposes. Probation (period of probation). Probation may not exceed six months. During probation the employer can end the contract with 14 days' written notice. If an employee wants to leave during probation to join another UAE employer, they give 30 days' notice; to leave the country, 14 days. These notice rules are set by the law, not just the contract. Notice after probation. Once past probation, either side ends the contract on the notice stated in the contract, which must be between 30 and 90 days. Pay and benefits continue through the notice period. End-of-service gratuity. A full-time employee who completes at least one year of continuous service is entitled to end-of-service gratuity on leaving. The standard calculation is 21 days of basic pay for each of the first five years of service and 30 days of basic pay for each year after that, based on the last basic wage, capped at two years' total pay. Gratuity is calculated on basic salary, not on allowances. Pay and the WPS. Wages must be paid through the Wages Protection System (WPS), the electronic transfer system MOHRE uses to confirm salaries are paid on time. The contract should state the basic wage and allowances separately, because gratuity and some other entitlements turn on the basic wage. Leave and hours. Employees are generally entitled to 30 days of paid annual leave after one year of service (prorated earlier), plus public holidays, sick leave and other statutory leave. Working time and overtime rules apply under the law. Work permit and Emiratisation. A foreign employee needs a valid work permit and residency sponsorship tied to the employer. Larger mainland companies are subject to Emiratisation targets for hiring UAE nationals. Grounds for termination. The contract can end by expiry, by agreement, or on notice, but the law also lists specific grounds. An employer can dismiss summarily only for the serious reasons set out in the law, and an employee can leave without notice in defined situations, such as the employer failing to meet its obligations. A dismissal that does not follow the law can lead to a compensation claim for arbitrary or unlawful termination, so the reason and the process both matter. Work models. The law recognises several work models beyond the traditional full-time job, including part-time, temporary and flexible work. If you are engaging someone on one of these models, the contract should say which model applies, because entitlements such as gratuity are calculated by reference to actual service. ## Non-compete under Article 10 A post-employment non-compete is allowed but limited. Under Article 10 of the law, a non-compete is valid only where the role gave the employee access to clients or confidential information, and it must be limited in time, place and type of work. The maximum duration is two years from the end of the contract. The Executive Regulations place the burden of proving the damage on the employer, UAE courts generally award financial compensation rather than stopping an employee joining a competitor, and the restriction falls away if the employer ends the contract in breach of the law. Keep any non-compete narrow and specific, or it will not be enforced. ## A usable template Adapt to your facts and the MOHRE standard form, and have a UAE lawyer review anything material. UAE EMPLOYMENT CONTRACT (mainland) 1. Parties. [Employer, trade licence number, registered address] and [Employee, passport and Emirates ID details]. 2. Term. Fixed term from [date] to [date], renewable by agreement. 3. Position and duties. [Job title and main duties.] 4. Probation. Up to six months from the start date, with 14 days' notice to end during probation. 5. Place and hours of work. [Location]; working hours and days per the law; overtime terms. 6. Pay. Basic wage of [amount] plus allowances of [amount], paid monthly through the WPS. 7. Notice after probation. [30 to 90] days' written notice by either party. 8. Leave. 30 days of paid annual leave after one year, plus public holidays, sick leave and other statutory leave. 9. End-of-service gratuity. Payable after one year of service, calculated under the law on the basic wage. 10. Confidentiality and non-compete. The Employee keeps company information confidential. Any non-compete is limited to [period, up to two years], [place] and [type of work], consistent with Article 10. 11. Governing law and jurisdiction. UAE Federal Decree-Law No. 33 of 2021; the competent UAE courts. Signatures, dated. ## A short walk through the key clauses Term and probation must match the law: fixed term, probation no longer than six months, and the statutory probation notice rules, which override anything shorter the contract tries to impose. Basic wage versus allowances matters more than it looks. Because gratuity is calculated on basic pay, a contract that loads most of the package into allowances reduces the employee's gratuity. Set the split honestly and clearly. Non-compete should be drafted narrowly. A broad, long or vague restraint will not hold up under Article 10. ## Red flags to check before signing - An unlimited-term contract, which no longer exists under the current law.

• Probation longer than six months, or probation notice terms below the statutory minimums.
• Gratuity calculated on a tiny basic wage with the real pay hidden in allowances.
• Wages paid outside the WPS.
• A non-compete that is nationwide, open-ended or covers the whole industry. ## Keeping the relationship compliant after signing A UAE employment contract carries duties that run through the whole engagement: the fixed term and its renewal, the end of probation, WPS payments, leave balances, and the gratuity calculation when someone leaves. Drafting a UAE employment contract that matches Federal Decree-Law No. 33 of 2021, checking that probation, notice, the basic-wage split and any non-compete are compliant, and tracking the term, probation and renewal dates can sit in one AI workspace tuned to how your company hires. Adira is built around that idea: it drafts from a template, models the contract as linked clauses so it can flag a probation period over six months or an over-broad non-compete, and keeps the key dates and obligations in one place. Adira is India-first today, with jurisdictions set per contract and an international mode for others; in-language Arabic support and deep, verified coverage of UAE law are on its roadmap rather than established, so treat UAE specific output as a draft for a UAE lawyer to confirm. This page is general information, not legal advice. UAE labour rules and MOHRE decisions change, so confirm the current requirements for your case, and note that DIFC and ADGM free zones follow their own employment laws.