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28 February 2024

‘Over 75% registered labour contracts non-fixed term’

By Wam

The Ministry of Human Resources and Emiratisation announced recently a vast diversion towards non-fixed term contracts between both production parties hitting 75.53 per cent of the total number of newly issued and renewed contracts for the past two months.

This came following a recent study issued by the Ministry to follow-up on the three new decrees issues by Saqr bin Ghubash Saeed Ghubash, Minister of Human Resources and Emiratisation, which was launched beginning of 2016.

Humaid bin Deemas Al Suwaidi, Assistant Under-Secretary for Labour Affairs said, "The number of the job offers printed during the last month confirms clarity and ease to issue a working relation between employers and workers in accordance with the newly launched decrees, which aim to establish and promote a balanced and productive working relation between both ends based on cooperation and transparency in order to preserve and maintain legal rights".

Al Suwaidi said, "If a party wishes to end a fixed-term contract prior to renewal, a notification letter must be issued and sent to the other party before the contract expiry date, then complete the notice period which was agreed between both sides mounting to one month and not exceeding three months period."

"Selecting more non-fixed term contracts indicates that employers have identified the benefits of selecting such contracts following the launch of the new decrees, something contrary to what prevailed in the labour market previously, as fixed-term contracts were commonly used by employers back then, yet both contracts preserve rights similarly, but the later tends to uphold some financial obligations when both side come to an end.

"The total number of new employment (non-fixed term) contracts issued by the ministry during the past two months reached 151,056 contracts and fixed-term ones recorded at 60,153 while the total number of non-fixed term contracts renewed during the same period reached 233,403 contracts and fixed-term ones reached 65,050," he added.

Al Suwaidi believes that UAE implements two types of contracts to serve different interests in the labour market according to professions, job tasks and activities carried out by the facilities, "Picking fixed-term contracts applies mostly to labourers as it may seem that the nature of their occupations requires that type of contract, which carries both parties to abide to legal responsibilities between each other especially in the event of a party decides to violate the terms of the contract or wish to end it without the consent of the other party," he said.

Yet, when the labour market records a shift towards non-fixed contracts, according to the recently launched statistics, Al Suwaidi considers it a developmental impact in the UAE labour market, especially as this type of contract allows the parties more freedom in ending the contractual relationship when compared to the other type, something which effectively contributes to raising the productivity and performance of the labor market and improving working conditions and wages.

"Non-fixed contracts has positively reduced labour disputes, as our data shows a large proportion of disputes arise between employers and workers abiding to fix-term contracts, due to ending procedures and the subsequent legal obligations," he said.

Al-Suwaidi stressed, "Workers must look into job offers and annexes in their preferred languages before signing the contracts to reach a healthy work relationship between both ends; annexes must be reviewed as they hold a number of labour laws and amendments. They’re also urged to go through expired contracts if they wish to renew and presume working with the same employer and conceivably upturn their benefits if both ends agree prior to signature."