The UAE job market has always been dynamic, but a major overhaul to the Federal Labour Law (Decree-Law No. 33 of 2021 and its subsequent amendments) has officially redefined the employer-employee relationship.

For decades, many professionals operated under the ‘Unlimited’ contract. That contract type is now officially a thing of the past.

If you are a job seeker—whether you are currently in the UAE or planning your move—understanding these critical legal updates is essential to protecting your rights and successfully negotiating your next job offer.

This is fantastic! Based on the UAE Job Hiring focus, I’ve used current market insights to craft a high-value blog post for your “Gulf Career Compass.”

This article focuses on the legal and strategic shift in the UAE market, which is a major concern for both new and existing expats.

🇦🇪 Gulf Career Compass Blog Post

Title: The End of ‘Unlimited’ Contracts: 5 New Laws Every UAE Job Seeker Must Know in 2025

Introduction: A New Era for UAE Employment

The UAE job market has always been dynamic, but a major overhaul to the Federal Labour Law (Decree-Law No. 33 of 2021 and its subsequent amendments) has officially redefined the employer-employee relationship.

For decades, many professionals operated under the ‘Unlimited’ contract. That contract type is now officially a thing of the past.

If you are a job seeker—whether you are currently in the UAE or planning your move—understanding these critical legal updates is essential to protecting your rights and successfully negotiating your next job offer.

Here are the five most important changes you need to know about right now:

1. 📝 Mandatory Fixed-Term Contracts (Max 3 Years)

The biggest change: all new contracts must be fixed-term (or ‘limited’).

• What This Means: Your contract will have a clear start and end date, with a maximum duration of three years. It can be renewed upon mutual agreement.
• Your Strategy: When reviewing a job offer, pay close attention to the contract duration. A shorter duration (e.g., one year) gives the employer more flexibility. Don’t be afraid to negotiate for a longer initial term (2-3 years) if you are committed to the role and the country.

2. ⏱️ Probation Period: Clear Notice Rules

The maximum probation period remains six months, but the rules for termination during this period are now much clearer, offering protection to both parties.

• Your Strategy: Be highly prepared and professional during the first 6 months. Crucially, if you resign to move to another local company during probation, you must give a full month’s notice.

3. 💸 Gratuity: Calculation is Now Clearer

End-of-Service Gratuity (severance pay) calculation is a frequent point of confusion, but the new law makes it much clearer.

• The Golden Rule: Gratuity is calculated based only on your Basic Salary, not the total ‘All-Inclusive’ package.
• The Entitlement: You are now generally entitled to gratuity regardless of the contract’s term or the reason for termination (including resignation).
  • 21 days of Basic Salary for each of the first five years of service.
  • 30 days of Basic Salary for each year of service after the first five.
• Your Strategy: Always negotiate the highest possible Basic Salary component in your overall package, as this directly affects your long-term end-of-service entitlement.

4. 🚪 Express Recognition of ‘Redundancy’

Previously, ‘redundancy’ was not explicitly defined in the law, leading to confusion. Now, termination for economic or restructuring reasons is a recognized, valid ground for ending a contract, provided the employer follows due process.

• What This Means: Companies can legally let you go due to restructuring or insolvency, but they must provide clear documentation and adhere to your contractual notice period.
• Your Strategy: Job security is greater due to the clear notice requirements. If terminated, ensure you receive a written termination letter and your full entitlements (including gratuity) within 14 days of your last day of work.

5. 🧘 Flexible & Remote Work is Officially Lawful

The law now formally recognizes several modern work models, legally protecting employees who don’t follow the traditional 9-to-5, office-based schedule.

• New Work Models Include:
  • Part-Time Work (with pro-rated benefits).
  • Temporary Work (for project-based assignments).
  • Flexible Work (variable hours/days based on workload).
  • Remote Work (working outside the physical workplace).
• Your Strategy: If you are seeking a part-time or remote role, your rights are now legally protected under the Ministry of Human Resources and Emiratisation (MOHRE). Ensure the contract explicitly states the working model you’ve agreed to.