UAE Labour Law Guide – Probation, Termination Notice, End-of-Service Benefits, Annual Leave, Contracts and Part-Time Work Explained

Understanding the Current UAE Labour Law Framework and Official UAE Labour Law Sources

Estimated reading time: 15 minutes

Key Takeaways

• The UAE private sector is now governed by Federal Decree-Law No. 33 of 2021 (amended by Decree-Law No. 20 of 2023 and further amended by Federal Decree-Law No. 9 of 2024), fully effective since 2 February 2022. In fact Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationship, as amended by Federal Decree-Law No. 20 of 2023 and further amended by Federal Decree-Law No. 9 of 2024, is the governing legislation for private sector employment in the United Arab Emirates, fully effective since 2 February 2022 and repealing Federal Law No. 8 of 1980 for the private sector
• Traditional unlimited-term employment contracts have been replaced by fixed-term employment contracts for all MoHRE-regulated private sector employment, and statutory provisions no longer impose a maximum three-year cap on contract durations following subsequent amendments.
• Probation is capped at 6 months with set notice obligations; termination notice is 30 days unless otherwise agreed within statutory limits.
• End-of-service gratuity is calculated solely on the employee’s basic wage, excluding allowances and bonuses, at a rate of twenty-one days’ basic wage for each of the first five years of service and thirty days’ basic wage for each year thereafter, with a total gratuity not exceeding the equivalent of two years’ basic wage.
• Annual leave, maternity leave and all statutory entitlements are clearly codified and must be honoured or encashed on termination.

UAE Labour Law Employment Contract Template, Probation Period Rules and Termination Notice Requirements

Any UAE labour law employment contract template must reflect the mandatory content of Federal Decree-Law No. 33 of 2021 and Cabinet Resolution No. 1 of 2022. Contracts must be in writing in Arabic (with parallel translations permitted), registered electronically with MoHRE, and include:

• Party details, trade licence and personal particulars
• Job title, description, place of work and work model
• Basic wage, allowances, payment frequency
• Probation clause (max 6 months) with start date and notice terms
• Fixed term, commencement date, working hours, rest days and leave entitlements
• Termination provisions and dispute resolution forum

Under Article 9, the probation period may not exceed 6 months. During the probation period, termination by the employer requires at least fourteen days’ prior written notice; an employee who seeks to join another employer must provide one month’s prior written notice, while an employee who intends to leave the United Arab Emirates must provide fourteen days’ prior written notice, subject to statutory conditions under Article 9. Successful completion counts toward continuous service.

For termination of fixed-term contracts, written notice of 30 days is required unless the contract stipulates otherwise within statutory limits. Termination without notice is restricted to serious statutory grounds; mutual shorter notice is possible but cannot waive statutory minima to employees’ detriment.

UAE End of Service Benefits and UAE Gratuity Calculation under Federal Decree-Law No. 33 of 2021

End-of-service benefits are governed by the unified gratuity framework. Once an employee completes at least 1 year of continuous service, they qualify for gratuity regardless of who initiates termination, unless forfeited for gross misconduct. Gratuity is based on basic wage only, excluding allowances and bonuses unless contractually classified otherwise.

Article 51 provides:

For each of the first 5 years: 21 working days’ basic wage per year.
Beyond 5 years: 30 working days’ basic wage per year.
Pro-rata for partial years; capped at 2 years’ total remuneration.

A practical gratuity benefits calculation might summarise the formula as:

Gratuity = (Last Monthly Basic Salary ÷ 30) × [21 days × years ≤ 5 + 30 days × years > 5] (subject to pro-ration and cap).

UAE Labour Law Annual Leave Entitlement: Annual Leave, Maternity Leave and Other Key Rights

An up-to-date UAE labour law annual leave entitlement must reflect Article 29:

• Under Article 29, an employee who completes one year of continuous service is entitled to thirty calendar days of paid annual leave, and those with more than six months but less than one year of service are entitled to two days of leave for each month of service, subject to employer scheduling and statutory notice.
• Unused leave may be carried forward or encashed at termination.

Additionally, employees receive at least one weekly rest day, paid public holidays as announced, and maternity leave of 60 days (45 days full pay, 15 days half pay). Special leaves (parental, compassionate) are also codified.

UAE Labour Law Unfair Dismissal Guide, Work Permit Cancellation and Part-Time Employment Regulations

A UAE labour law unfair dismissal guide should explain arbitrary dismissal remedies. Complaints go to MoHRE for conciliation, then to court if unresolved. Compensation ceilings consider service length, salary and prejudice suffered.

Summary dismissal grounds include proven fraud, willful damage, safety breaches, repeated insubordination and other serious misconduct. Employers must follow fair processes and retain evidence.

Work permit cancellation must occur promptly after termination; delays can trigger fines and impact establishment classification under Cabinet Resolution No. 18 of 2022. Employees benefit from immigration grace periods to secure new sponsorship or exit.

Part-time work is a recognised model. Contracts must state hours and patterns; benefits (wages, leave, gratuity) are pro-rated. Multiple part-time roles are allowed if work permits and non-conflict conditions are met.

Practical Compliance, Documentation and Strategic Use of UAE Labour Law in 2026

Well-structured UAE labour law PDFs serve as compliance tools for employers and rights-awareness guides for employees. Key practices include:

• Drafting fixed-term contracts that align with visa validity and sector needs.
• Implementing structured probation reviews within the 6-month limit.
• Aligning disciplinary and termination procedures with statutory concepts to mitigate arbitrary dismissal risk.
• Auditing basic wage definitions for consistent gratuity calculation.
• Training HR on work permit issuance/cancellation, leave management and part-time arrangements.

For complex matters—executive terminations, restructurings, cross-border assignments—tailored legal advice is recommended. Official portals remain essential, but bespoke analysis ensures accurate application.

FAQ

• What is the maximum probation period under UAE Labour Law?
  Probation may not exceed 6 months. Termination during probation requires 14 days’ written notice by either party (or 1 month if moving to another employer).
• How is end-of-service gratuity calculated?
  Gratuity = (Last Monthly Basic Salary ÷ 30) × [21 days × years up to 5 + 30 days × years beyond 5], pro-rated for partial years, capped at two years’ total remuneration.
• What notice periods apply for contract termination?
  After probation, 30 days’ written notice is required unless contractually agreed within statutory limits. Summary dismissal is limited to defined serious misconduct.
• Are part-time employees entitled to benefits?
  Yes. Part-time employees receive pro-rated wages, leave, end-of-service benefits and other statutory entitlements based on actual hours worked.
• Can unused annual leave be carried forward or encashed?
  Unused leave may be carried forward or monetised subject to internal policy and statutory limits; must be paid out at termination based on basic wage.