UAE Employment Contracts: What Employers and Employees Should Check

Which rules apply to you

Mainland (MOHRE)

Employment is governed by the federal labour law and its executive regulations. The employment relationship is documented in a contract registered with MOHRE, alongside the work permit and residence visa process. The registered contract is the document the authority will look at in a dispute, so a side letter that contradicts it creates a problem rather than solving one.

Free zones

Most free zones apply the federal framework, with the zone authority handling permits and contract registration on its own forms. Some zones add their own employment rules on top. Check the specific authority's requirements rather than assuming they match MOHRE exactly.

DIFC and ADGM

Both financial free zones have their own employment legislation, distinct from the federal law. They differ on notice, end-of-service or workplace savings arrangements, penalties for late final payment, and the treatment of post-termination restrictions. Do not apply mainland assumptions to a DIFC or ADGM contract.

Employment rules and the applicable registration process are set by MOHRE, the relevant free zone authority, or the DIFC or ADGM authorities and are updated from time to time. Verify the current position against the applicable official source.

The clauses to check before signing

1. Job title, duties and place of work. Vague duties make later performance disputes harder for both sides.
2. Salary structure. The split between basic salary and allowances matters because end-of-service and some other entitlements are calculated on basic salary.
3. Contract term and renewal. Confirm the term, the renewal mechanism and what happens on expiry.
4. Working hours, overtime and rest days, including how they change during Ramadan.
5. Annual leave, sick leave, parental leave and public holidays, and how untaken leave is treated on exit.
6. Notice period and termination grounds, including probation rules and what each side must do to end the contract lawfully.
7. End-of-service entitlement, or participation in an approved savings scheme where the employer uses one.
8. Confidentiality, intellectual property assignment, and any non-compete or non-solicit — including its duration and geographic scope.
9. Repatriation, visa costs and what happens to them on resignation versus termination.

For employers

The most common failures are administrative rather than dramatic: a registered contract that no longer matches what the employee actually does, contractors who are treated as employees, and terminations run without the notice or documentation the regime requires.

• Keep the registered contract, the offer letter and the reality of the role aligned.
• Classify contractors carefully, and use freelance permits where appropriate.
• Provision for end-of-service properly in the accounts, or enrol in an approved scheme.
• Document performance issues contemporaneously, not retrospectively.
• Run terminations to a checklist: notice, final settlement calculation, leave encashment, visa cancellation and the labour authority steps.
• Draft restrictive covenants narrowly, because an unreasonable one may not be enforceable.

Our hiring service is AED 1,450 and covers a compliant contract and onboarding pack. A clean employee exit is AED 2,450.

For employees

• Ask for the registered contract, not only the offer letter, and check they match.
• Confirm the basic salary figure, because it drives your end-of-service calculation.
• Check the notice period on both sides and whether probation has different rules.
• Understand what a non-compete would restrict in practice, and for how long.
• On exit, check the final settlement line by line: salary to the last day, untaken leave, end-of-service, and any deduction claimed.
• Keep copies of everything: contract, payslips, leave records and any written warning.

If you have been given a settlement figure and are not sure it is right, our final settlement check is AED 350 and returns a written view on the calculation and what to ask for.

If something goes wrong

Onshore labour complaints start with the relevant labour authority, which attempts settlement before the matter moves to the courts where required. DIFC and ADGM employment claims go to their own courts under their own employment legislation. Time limits apply to bringing claims, and they are short enough to matter.

Before filing anything, get the documents assessed. A well-evidenced claim settles far more often than a strongly worded one — the same principle set out in our guide to sending a legal notice in the UAE.

Practical checklist

• Identify which regime applies: MOHRE, free zone, DIFC or ADGM.
• Obtain the registered contract, not just the offer letter.
• Confirm the basic salary versus allowances split.
• Check notice periods and probation rules on both sides.
• Confirm leave entitlement and how untaken leave is treated.
• Understand the end-of-service or savings scheme position.
• Assess any non-compete for scope and duration.
• Confirm who bears visa and repatriation costs.
• Keep contemporaneous records throughout the employment.

Common mistakes

• Relying on an offer letter that differs from the registered contract.
• Assuming DIFC or ADGM rules match mainland rules.
• Structuring salary as almost entirely allowances without understanding the effect.
• Treating employees as contractors to avoid permits.
• Terminating without following the required process or documenting the reason.
• Signing a final settlement before checking the calculation.
• Missing the time limit for bringing a claim.

Frequently asked questions