# unlimited contracts vs fixed term contracts



## qwert97

I was wondering if someone can provide the insight into the advantages of each employment contracts (unlimited vs fixed term) and which is more prevalent in Dubai.


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## hari

Always go for Unlimited contract. I was working on a limited contract with my previous employer. I resigned after 1 year & 3 months but as it was limited contract, company recovered 45 days salary. Also there was a 6 months automatic ban. In unlimited contract you can resign by giving the notice period without any penalty.


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## qwert97

Thanks for info. Is it subjective on the company to recover 45 days salary? I did not see anywhere in the labor law. Also, I did not know about the 6 months ban.


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## MirdifMellow

I thought that there was a six month ban placed on you when you left an employer no matter what type of contract you were on.


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## Maz25

qwert97 said:


> Thanks for info. Is it subjective on the company to recover 45 days salary? I did not see anywhere in the labor law. Also, I did not know about the 6 months ban.


If you are on a fixed term contract and tender in your resignation before the end of the contract period, you are liable to pay your employer 1.5 months' salary or 1 month's salary for each month remaining on your contract, whichever is less! (see extract from labour law below) And yes, you will get an employment ban. I would say to go for the unlimited contract all the time. You will save yourself a lot of trouble in the long run.

_If the contract is terminated by the employee for reasons other than those stipulated under Article 12l of the Law, the employee will be liable to compensate the employer against any loss resulting from the termination. The amount of compensation payable is calculated on the basis of the employee’s salary for one month and a half or the salary payable for the remaining period of the contract, whichever is less, unless the contract states otherwise_

Saying that, read your employment contract very carefully as most employers insert a clause in there making you liable for the visa and relocation costs paid to you, should you leave before serving 12-24 months service.


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## qwert97

Wow. I am glad that at the last moment I changed my mind and asked them to change the wording of the offer from 'term contract' to unlimited.

This forum rocks!!!!!


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## Samirak

Maz25 said:


> If you are on a fixed term contract and tender in your resignation before the end of the contract period, you are liable to pay your employer 1.5 months' salary or 1 month's salary for each month remaining on your contract, whichever is less! (see extract from labour law below) And yes, you will get an employment ban. I would say to go for the unlimited contract all the time. You will save yourself a lot of trouble in the long run.
> 
> _If the contract is terminated by the employee for reasons other than those stipulated under Article 12l of the Law, the employee will be liable to compensate the employer against any loss resulting from the termination. The amount of compensation payable is calculated on the basis of the employee’s salary for one month and a half or the salary payable for the remaining period of the contract, whichever is less, unless the contract states otherwise_
> 
> Saying that, read your employment contract very carefully as most employers insert a clause in there making you liable for the visa and relocation costs paid to you, should you leave before serving 12-24 months service.


Hi there, I was reading this and i am very much suffering from this situation i have resigned from a job with a 3 year limited contract of which I wasnt aware and a very nieve new expat. Now I have to pay a 45 day Salary pay out to my previous employer but I am querying how they are working it out, currently They are basing it on my basic salary, plus accomodation plus transportation and mobile phone so my whole salary package

However I have been advised that it is normally calculated on your basic salary excluding housing, phone and Transport. This is a huge factor for me as it would drop a 27,000 aed compensation to half of that amount. I ahve questioned them and they are refering to an old copy of the Labour contract where it states i should pay 3 months *Remuneration *as long as it is no more than half my salary amount per month

However recent Labour law agreements have changed this word remuneration to Wage, so I am confused if they should be calculating it on my basic salary

any guidance is most appreciated


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## qwert97

Samirak said:


> Hi there, I was reading this and i am very much suffering from this situation i have resigned from a job with a 3 year limited contract of which I wasnt aware and a very nieve new expat. Now I have to pay a 45 day Salary pay out to my previous employer but I am querying how they are working it out, currently They are basing it on my basic salary, plus accomodation plus transportation and mobile phone so my whole salary package
> 
> However I have been advised that it is normally calculated on your basic salary excluding housing, phone and Transport. This is a huge factor for me as it would drop a 27,000 aed compensation to half of that amount. I ahve questioned them and they are refering to an old copy of the Labour contract where it states i should pay 3 months *Remuneration *as long as it is no more than half my salary amount per month
> 
> However recent Labour law agreements have changed this word remuneration to Wage, so I am confused if they should be calculating it on my basic salary
> 
> any guidance is most appreciated


As Per Article 116 of the labor law you are entitled to compensate them for 45 days of wage. You can download a copy of the latest labor law from Ministry of labor website and show it to your employers. As far as I know the notice pay should be based on the base salary since they use the expression wage and not salary. In practice however I have seen it being calculated including all allowances. If e.g you are given a notice by the company you would expect full salary during notice period.

I hope you have considered the labor ban issue as well. In case you break a limited term contract the labor department automatically puts a year ban on you.


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## koleng

MirdifMellow said:


> I thought that there was a six month ban placed on you when you left an employer no matter what type of contract you were on.


hi, I am new here... just want to ask if my previous company can give me ban, i worked with them for only 3 months. According to the labour law, the company must process or finish my labour card as well as my residency within 2 months from the date of my arrival in Dubai with employment visa. Sad to say, after three months working in that company I didn't sign any employment contract!!! I just signed my offer letter but they did not gave me any copy of it and after my 1st day I took my medical, I've been asking for a copy of my offer letter but they told me that they don't give a copy to any employee.
Now, I am here in Singapore and planning to move to dubai next month since my husband is still working there. please let me know the rule regarding ban even i dont have any contract.

thanx


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## zacked

hari said:


> Always go for Unlimited contract. I was working on a limited contract with my previous employer. I resigned after 1 year & 3 months but as it was limited contract, company recovered 45 days salary. Also there was a 6 months automatic ban. In unlimited contract you can resign by giving the notice period without any penalty.


Do you mean there wont be 6 month ban... i am having an unlimited contract


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## rebeccatess

Can anyone clarify if this applies for Free Zones as well as MOL and TECOM are saying different things and my boss is obviously going to go with MOL where I have to pay back 20k over TECOM who are saying If I have worked for over 1 year then I do not have to pay.

Please can someone advise.....


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## Maz25

The freezones have their own rules which can sometimes be different to that set and applied under the Labour Law. My understanding is that if you are sponsored by a freezone, their rules will apply in the event of a dispute, unless your contract states otherwise and clearly makes reference to the Labour Law.

Any disputes should also be referred to the Freezone Authority as opposed to the Ministry of Labour.


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## neeleshgupta8480

Hi friends,

I have a Unlimited Employment Contracts (maximum two years) with free zone company in DAFZA, dubai,

I have complied 16 months in my job,

I am going to submit my resignation since i got a job out side free zone...
*
Now Kindly advice:*
*
* will i get any ban by my current employer?

* do I have to give 45 days salary to my current employer since i have not completed 2 yrs?

* How would my gratuity / End of Services benefits would be calculated?*

I was wondering if someone can provide the insight into the advantages / disadvantages of unlimited employment contracts in Dafza / Dubai.

many thanks in advanced....


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