Hi,
I'm confused about Limited & Unlimited contracts. Could anyone define that for me? Could you also tell me what the notice period is for both of these? I keep hearing different explanations but I'm not sure which one is correct.
From United Arab Emirates, Dubai
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3I'm confused about Limited & Unlimited contracts. Could anyone define that for me? Could you also tell me what the notice period is for both of these? I keep hearing different explanations but I'm not sure which one is correct.
From United Arab Emirates, Dubai
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Limited Contract
It will be for a specified period, say, 3 years. You should complete the entire contractual period; only then will you be entitled to the gratuity. In case you have to resign, you should pay one and a half months' salary to the employer or the remaining period's salary, whichever is less.
Unlimited Contract
This is for an unlimited period, and you can resign by giving one month's notice. The gratuity will be based as follows:
- More than 1 year but less than 3 years: 7 days of basic salary as gratuity.
- More than 3 years but less than 5 years: 14 days of basic salary as gratuity.
- Completed 5 years: 21 days of basic salary.
- More than 6 years: For the first 5 years, 21 days of basic salary; from the sixth year onwards, 30 days of basic salary as gratuity.
From Australia, Adelaide
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It will be for a specified period, say, 3 years. You should complete the entire contractual period; only then will you be entitled to the gratuity. In case you have to resign, you should pay one and a half months' salary to the employer or the remaining period's salary, whichever is less.
Unlimited Contract
This is for an unlimited period, and you can resign by giving one month's notice. The gratuity will be based as follows:
- More than 1 year but less than 3 years: 7 days of basic salary as gratuity.
- More than 3 years but less than 5 years: 14 days of basic salary as gratuity.
- Completed 5 years: 21 days of basic salary.
- More than 6 years: For the first 5 years, 21 days of basic salary; from the sixth year onwards, 30 days of basic salary as gratuity.
From Australia, Adelaide
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Hi Lizancy,
I have 2 years of experience as an HR generalist. Would it be helpful if you could clarify the following:
Can I work in the UAE (Dubai) if I go there on a dependent visa? Will there be any difference in compensation if working on a dependent visa or a self visa? Also, please let me know if a couple can survive on 7000 AED if accommodation is provided by the company.
Regards, Chand
From United Arab Emirates, Dubai
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I have 2 years of experience as an HR generalist. Would it be helpful if you could clarify the following:
Can I work in the UAE (Dubai) if I go there on a dependent visa? Will there be any difference in compensation if working on a dependent visa or a self visa? Also, please let me know if a couple can survive on 7000 AED if accommodation is provided by the company.
Regards, Chand
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From United Arab Emirates, Dubai
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Hi Lizancy,
In the limited contract, you have mentioned, "It will be for a specified period, say 3 years." You should complete the entire contractual period; only then will you be entitled to the gratuity. In case you have to resign, you should pay one and a half months' salary to the employer or the remaining period's salary, whichever is less.
My question is, after paying one and a half months' salary to the employer or the remaining period of salary, is it certain that I can get an NOC from my employer?
From India
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In the limited contract, you have mentioned, "It will be for a specified period, say 3 years." You should complete the entire contractual period; only then will you be entitled to the gratuity. In case you have to resign, you should pay one and a half months' salary to the employer or the remaining period's salary, whichever is less.
My question is, after paying one and a half months' salary to the employer or the remaining period of salary, is it certain that I can get an NOC from my employer?
From India
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Dear All,
Whether you pay the specified amount to be released early from a limited contract, it still depends on your management's approval to provide you with a No Objection Certificate (NOC). It solely depends on the management's decision, and you cannot force them to issue an NOC.
Another important point is that gratuity is applicable to all employees, whether you are under the company's sponsorship, your father's sponsorship, or your husband's sponsorship. If you are working for them, you are certainly entitled to receive gratuity.
Take care,
Liz
From Australia, Adelaide
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Whether you pay the specified amount to be released early from a limited contract, it still depends on your management's approval to provide you with a No Objection Certificate (NOC). It solely depends on the management's decision, and you cannot force them to issue an NOC.
Another important point is that gratuity is applicable to all employees, whether you are under the company's sponsorship, your father's sponsorship, or your husband's sponsorship. If you are working for them, you are certainly entitled to receive gratuity.
Take care,
Liz
From Australia, Adelaide
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Dear All,
A document has been attached which will give you an understanding of Limited & Unlimited Contracts. This is an updated page from the UAE Labor Law.
Hope this would be of some help to you.
Best Regards,
Vilna
From United Arab Emirates, Dubai
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A document has been attached which will give you an understanding of Limited & Unlimited Contracts. This is an updated page from the UAE Labor Law.
Hope this would be of some help to you.
Best Regards,
Vilna
From United Arab Emirates, Dubai
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Dear Vilna Can you please send any links to the updated UAE Labour Laws as well as the Articles with regards to the Visa and Immigration laws Thanking you in anticipation Liz
From Australia, Adelaide
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From Australia, Adelaide
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Dear Liz, This is the usual extract of Law that I refer to..... Any chanes to the same can be reffered online . Regards Vilna
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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Employees under limited contracts are eligible for gratuity only upon completion of 5 years of service.
Employees under unlimited contracts are eligible for gratuity upon completion of 1 year of service if the employee resigns voluntarily. If an employee is terminated, gratuity is calculated pro rata for the fraction of the year.
From United Arab Emirates, Dubai
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Employees under unlimited contracts are eligible for gratuity upon completion of 1 year of service if the employee resigns voluntarily. If an employee is terminated, gratuity is calculated pro rata for the fraction of the year.
From United Arab Emirates, Dubai
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Vilna, The PDF File on limited and unlimited employment contract could not be opened as it shows error. Can you pls repost the said file.
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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Vilna Me niether could not open PDF File on limited and unlimited employment contract as it shows error. Can you pls repost the said file.
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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hi sir, my contract is unlimited and i am still working more than 3 years now if i resign from my company can there is any ban on me? 6 month or 3 month please help me
From United Arab Emirates, Abu Dhabi
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From United Arab Emirates, Abu Dhabi
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My contract states: Period of Contract: Three Years and further renewable. I would take that as being an unlimited contract. Can somebody confirm this?
I have just been released by the company after 20 months of employment. I was given 1 month's notice (which I am not required to work). Would I expect 3 months of compensation plus full gratuity (21 days)?
From United Arab Emirates, Dubai
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I have just been released by the company after 20 months of employment. I was given 1 month's notice (which I am not required to work). Would I expect 3 months of compensation plus full gratuity (21 days)?
From United Arab Emirates, Dubai
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Hi folks,
I have a query on Gratuity payment on Limited contracts - as quoted, if a person resigns before completing 5 years on a limited contract, he/she is not eligible for gratuity. The same law also states that limited contracts are only for a maximum period of 4 years, so after that, does it become unlimited?
So if it's unlimited, then after completing 4 years, an employee should get 21 days' salary and not zero gratuity. Normal practice in most companies is to renew the contracts every 3 years, and the labor simply stamps on the old contract, extending it for 3 years (with no specified period). If that is the case, then is it still a limited contract or an unlimited contract?
Someone, please clarify my query.
Thank you & Regards,
Jessie J
From United Arab Emirates, Dubai
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I have a query on Gratuity payment on Limited contracts - as quoted, if a person resigns before completing 5 years on a limited contract, he/she is not eligible for gratuity. The same law also states that limited contracts are only for a maximum period of 4 years, so after that, does it become unlimited?
So if it's unlimited, then after completing 4 years, an employee should get 21 days' salary and not zero gratuity. Normal practice in most companies is to renew the contracts every 3 years, and the labor simply stamps on the old contract, extending it for 3 years (with no specified period). If that is the case, then is it still a limited contract or an unlimited contract?
Someone, please clarify my query.
Thank you & Regards,
Jessie J
From United Arab Emirates, Dubai
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Hi, I have started employment with a UAE company; however, I am severely unhappy. I am sure if I were to leave, I wouldn't get an NOC from my manager. I am under an unlimited contract. Do I have any hope of being able to get out of this? What is a legitimate reason to terminate employment? I have also been told I could work in a free zone without an NOC. Is this true?
Thanks,
Alison
From United Arab Emirates, Dubai
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Thanks,
Alison
From United Arab Emirates, Dubai
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hi , my friend is working in a dubai company with unlimited contract since january 2010.What are the bans&compensation he will face if he resign now in 1 month notice(ie.before completion of 1year)?
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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Attached complete abstract of UAE Labour Law for your reference. Thanks and Regards, Narayanan Kutty
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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Dear All,
According to labor law in the UAE, there are 2 types of contracts:
1. Limited
2. Unlimited
Limited contract:
In a limited contract, it is for a stipulated period of time. For example, it can be for 2 years, 3 years, or a maximum of 4 years. If you break the contract in between, you have to pay 45 days' salary to the employer if the employee is breaking it, and if the employer is breaking (termination), 2 months' salary plus the number of days' salary mentioned in the contract for the notice period.
The contract is renewable, say after 2 years, 3 years, or 4 years as mentioned in your contract. If you serve for more than 5 years (e.g., a 3-year limited contract in the first period and a 2-year period in the next tenure of 3 years), you are eligible for gratuity as per UAE labor law, but you will face a ban of six months since the contract is broken.
Unlimited Contract:
It is for an unlimited period, for example, from 21.09.2010 to... Every 3 years, you have to renew your labor card, but not your labor contract. If you break the contract before three years, you are entitled to gratuity for 7 days, 14 days, 21 days, 30 days, etc., depending on your service period, but you will face a ban for six months. One more thing, this 7 days, 14 days gratuity is the minimum amount the company has to pay; if they are kind enough and wealthy, they can pay up to 21 or 30 days (how sweet!).
If you serve the company for more than 3 years in an unlimited contract, for example, 3.6 years, you will not face a ban (if you resign), but if terminated, you will get a salary only for the notice period mentioned in the contract (say 30 days, 45 days, 60 days, 90 days).
If I am wrong, please guide me.
Suresh
From United Arab Emirates, Dubai
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According to labor law in the UAE, there are 2 types of contracts:
1. Limited
2. Unlimited
Limited contract:
In a limited contract, it is for a stipulated period of time. For example, it can be for 2 years, 3 years, or a maximum of 4 years. If you break the contract in between, you have to pay 45 days' salary to the employer if the employee is breaking it, and if the employer is breaking (termination), 2 months' salary plus the number of days' salary mentioned in the contract for the notice period.
The contract is renewable, say after 2 years, 3 years, or 4 years as mentioned in your contract. If you serve for more than 5 years (e.g., a 3-year limited contract in the first period and a 2-year period in the next tenure of 3 years), you are eligible for gratuity as per UAE labor law, but you will face a ban of six months since the contract is broken.
Unlimited Contract:
It is for an unlimited period, for example, from 21.09.2010 to... Every 3 years, you have to renew your labor card, but not your labor contract. If you break the contract before three years, you are entitled to gratuity for 7 days, 14 days, 21 days, 30 days, etc., depending on your service period, but you will face a ban for six months. One more thing, this 7 days, 14 days gratuity is the minimum amount the company has to pay; if they are kind enough and wealthy, they can pay up to 21 or 30 days (how sweet!).
If you serve the company for more than 3 years in an unlimited contract, for example, 3.6 years, you will not face a ban (if you resign), but if terminated, you will get a salary only for the notice period mentioned in the contract (say 30 days, 45 days, 60 days, 90 days).
If I am wrong, please guide me.
Suresh
From United Arab Emirates, Dubai
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I am working in the company for the last 4 years and 4 months. It is a limited contract. I want to resign from my job due to family problems. Could you please clarify if any fine is applicable for me, and what about the gratuity?
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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Hi,
I'm an Indian who is working in a restaurant. I have a limited contract for 3 years, and it will expire on 07/08/13. I have successfully completed 2 years, but there is still 1 year remaining. Will there be any ban if I break my contract to opt for a new job? Please help me!
From United Arab Emirates, Dubai
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I'm an Indian who is working in a restaurant. I have a limited contract for 3 years, and it will expire on 07/08/13. I have successfully completed 2 years, but there is still 1 year remaining. Will there be any ban if I break my contract to opt for a new job? Please help me!
From United Arab Emirates, Dubai
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Please help me, if a limited contract finished as per the specified period of 2years, is the Employee entitled for 21 days per yer = 42 days, less the absences? please clarify... thanks
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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If a limited contract of 2years finished by an employee, he is entitled for 21 days Gratuity per year which is 42days and less the absences, as per the law.
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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@ Ruzella, if a limited contract of 2 years is completed by an employee, they are entitled to 21 days of Gratuity per year, which totals to 42 days, less any absences as per the law.
Yes, Ruzella. For a limited contract, when the employee completes the term specified in the contract, they are entitled to full gratuity, which amounts to 21 days for each year. Therefore, the total gratuity would be 42 days.
From United Arab Emirates, Dubai
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Yes, Ruzella. For a limited contract, when the employee completes the term specified in the contract, they are entitled to full gratuity, which amounts to 21 days for each year. Therefore, the total gratuity would be 42 days.
From United Arab Emirates, Dubai
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Fixed Term Contract Employees to get Gratuity.docx