Anatomy of Employment - MOHRE Contracts & Offer Letters in the UAE
Background of employment contracts in the UAE
Employment Contracts in the UAE - image showing a workplace
Image credit - Unsplash
While we already discussed the visas arising out of employment in the UAE, employment contract itself is a slightly different topic.
It’s relevant to mention that currently all employment contracts are limited in duration, with the maximum of 3 years, and normal duration of 2 years. But the history is interesting, since earlier the UAE had unlimited contracts which were pretty common, which is why, people who have lived in the UAE for a while, still talk about unlimited contracts, and until recently, unlimited contracts were being converted into limited contracts.
The employment contract will cover certain basic details like the ones mentioned under the next section below.
Mainland/onshore companies have a contract which is popularly referred to as MOHRE contract, due to the name of the Ministry i.e. Ministry of Human Resources & Emiratisation. This is registered with the relevant ministry. Earlier this used to be called the MOL contract (Ministry of Labour contract), and people who have been living long enough in the UAE still relapse into calling it by the old name.
Types and details of employment contracts in the UAE
Employment contracts cover details like employee personal details, salary (basic + allowances), probation period, notice period, working hours, annual leave, weekly off-days, etc.
Employment contract existence and format depend on the type of company. For example, whether it’s a free zone or mainland/onshore company, and if free zone, which free zone. Elaborating further, if you are working in Jebel Ali Free Zone, you will not have a MOHRE contract, you will have a contract under the free zone authority. And when you leave, you will not have a labour cancellation, because there is no “labour contract” as such, while you will still have a visa cancellation if you are sponsored by the company.
Having said that, each free zone is different, the rules change from time to time, so you must find out from the respective employer and their PRO team the exact details as applicable to your scenario, and seek professional advice where required.
Notice period can range from 30 days to 90 days. It’s not too clear what happens when the contract doesn’t have a notice period.
Designation is one from the list maintained by the ministry - it should be as close to the job profile or internal designation as possible.
Most of the roles and hence work permits are for full-time jobs. Part-time work is now allowed, which means that someone can have an arrangement to work for 2/3 days a week with an employer, or 20 hours a week. However, it’s not caught up yet in the market from the employer side, while many from the employee side desire it.
This contract is bilingual – in both English and Arabic, and Arabic prevails in case of any inconsistency.
Offer Letter versus Employment Contract in the UAE
Offer Letter versus Employment Contracts in the UAE - image showing a questionmark made of paper pieces
Image credit - Unsplash
Most of you would have also signed an offer letter - and people who are new to the country are often confused as to why they are made to sign two different contracts, and what’s the purpose of each.
An offer letter is just the document that signifies the commitment of each party to work with each other, no different from any other part of the world. While the labour contract is the document that formalises that relationship with the respective Ministry or authority.
An interesting point is that, the offer letter issued by the employer is often different from this MOHRE contract. Some of the elements might be the same, while some others have inconsistencies. While not ideal and can create confusion, this is pretty much the practice. Even basic things like notice period can be in mismatch at times.
One of the reasons is that the employers don’t customise the MOHRE template properly, e.g. it’s possible to edit certain fields and add special terms and conditions, but most employers don’t do it. So for example, if the template mentions 1 day off and notice period as 90 days, many employers will not change it to 2 days off or 30 days’ notice period even if that’s what is being offered as per their own offer letter (real life examples I have seen with my own employments in the past).
Offer letter can have many additional clauses like confidentiality, intellectual property, non-compete, non-solicit, company policies, dependency on approvals, etc.
In case of a conflict, the official document that is the labour/MOHRE contract prevails, however, there is also the principle that the employee should not suffer, so if the offer letter promised something more favourable to the employee, it’s likely that it will be upheld. Obviously, this kind of confusion is not in the interest of anyone, hence employers should try to have the two documents as much aligned as possible. And to the extent it’s not possible to mirror exactly, there are a couple of other ways. It’s possible to include certain additional clauses to the MOHRE contract, and many employers do it for non-compete restrictions. There is also the possibility of attaching the offer letter to the employment contract, as an annex to give those clauses similar value, but it’s not followed that much still.
Quick jargon decode
If someone says MOHRE/MOL/Labour contract - they are most likely referring to the official bilingual contract that will be registered with the Ministry to support your employment.
If someone says Offer Letter - they are most likely talking about the offer letter issued by the employer (which some companies can call as appointment letter, employment letter, and even employment contract, etc.)
If someone says Employment Contract - you need to check which one from the above two, or if there is a third category like free zone contract.
If you liked this post or think this can help someone, please do share the link forward. Please also check my other posts under the Labour & Visa section.