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Difference Between Limited and Unlimited Contract

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There are two types of law under UAE Labour law, one is known as limited and the other one is Unlimited contract. It will be unlimited contract when employee is can dismiss or terminate the contract by giving the notice a month before as it is not written one and possess unlimited term of employment.

The limited one is having a specific time period and the person will not be able to dismiss or terminate the contract.

We will have a look on both limited and unlimited contract:

Unlimited Contract

Now, this contract is not having an end or expiry date for the contract that when will it be expiring, but it does have a start date. If the relationship of employee and employer continue after working for a time period specified in the limited contract then this can result in unlimited contract. Moreover, if there is no documentation done for any contract it will be considered unlimited one.

If the employer wants to dismiss the employee in unlimited contract, they can do so but only if they have a valid reason for terminating the person and the reason ought to be the work related one.

This contract will continue if the employee and employer both do not have any kind of issue.

Limited Contract

This contract is having a start date as well as an expiry date and they range of this contract can be from one year to four years. The contract can be renewed after the expiry date and both parties can agree on the next contract. If the employee has done something wrong work related then he will be subjected to the Article 120 of the labour law.

Same as that the employee cannot leave the job unless the employer has violated something under the Article 121, if so then the employee can give the notice to the employer and can leave the job on a mutual agreement.

Information required for unlimited as well as limited contracts

  • Starting date
  • Place and type of work
  • Duration of the contract (for limited)
  • Amount of wage needed
  • Probation period
  • The period prior which the notice can be given i.e. 30 days
  • Annual leaves
  • Visa for residency
  • Limited contract should not be more than 4 years if so then it will come under unlimited contract

It is advised that before signing the contract it ought to be read carefully and then take the next step.

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