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So I had a discussion with the company about the status of my labor contract. Apparently, the labor agreement indicated that I’m under a LIMITED contract as opposed to an UNLIMITED one. I did not sign the contract right away as I wanted to talk to him about the change of conditions.

The reason why it’s an issue to me is because prior to this, the Job Offer Letter that they gave me stated that the contract was for an Unlimited period.

So what’s the difference between Limited and Unlimited Contract in the UAE Law?

I haven’t really read every single detail but the main difference between the two as far as my research are these:

LIMITED CONTRACT:

  • You are tied to the company for 2 years. If you resign before the contract ends, you will have an AUTOMATIC labor ban by UAE for 6 months.
  • Also, your employer can ban you for up to 6 months.
  • You cannot transfer to other companies within your contract.

Basically, your are stuck to your employer. The only option for you to get out (if you want to resign) is to find a job within a FREEZONE company or work in a GOVERNMENT-owned business, as these are exempted from any UAE Law Ban.

UNLIMITED CONTRACT:

  • Your contract is for 2 years. If you resign, you will have an AUTOMATIC labor ban by UAE for 6 months.
  • Also, your employer can ban you for up to 6 months.
  • You can transfer to other companies SO LONG AS your salary is at least 5000 Dirhams, and you have at least a High School Diploma to submit to the UAE Labor to go along that salary bracket.

This means that you can transfer if there is a better offer (at least 5000 Dirhams) elsewhere. You can still go to a FREEZONE company or work in a GOVERNMENT-owned business.

UAE Labor contract sample
UAE Labor Contract Photo Sample

The difference between the LIMITED and UNLIMITED contract is not that much. But knowing that the agreement in the Job Offer Letter from my employer that I signed was for an Unlimited Period, I was not comfortable agreeing to the labor contract that was presented to me.

I’ve been with the company for more than 5 months already, and they processed my Labor card late because of a slip-up. They had to pay Fines for the late application.

Going back to the discussion with my boss…

We initially talked over the phone and I told him my problems with the labor contract. It went to a point that I told him about other opportunities outside my employment. There may be other offers from other companies with better job packages within the 2-year timeframe. This was the time when my employer became furious.

He couldn’t believe that I was thinking of other jobs when he hired me in “good faith”. He said that he never expected this from me to look for employment elsewhere. I had to reply that my issue is with the job offer VS the labor contract as they were both different. But I also had to inform him that I play a big responsibility in my family who needs me back home.

During the end of that conversation, he told me that we should meet in his office the next day to clarify things out.

The next day…

We met and he explained the details of the Job Offer Letter to me. He told me that I was misled by the offer in the Contract Clause. In the offer letter, it said that “The contract is for an unlimited PERIOD…”

He explained that after the contract (2 years) expires, they can still renew/employ me under their company.

This was a critical and misleading statement written on paper that I didn’t clarify when I signed the offer letter as it seemed to me that it was clear. Unfortunately, this was not the case.

I did not want to argue anymore and I simply agreed to sign the labor contract. I also did not want to create as much conflict with my employer as I’m still working for him.

What I’m complaining about is the difference between the offer letter and how misleading it was vs the labor contract. I couldn’t say I would not sign it since I will still have an AUTOMATIC labor ban for 6 months. Besides, I’m not that miserable in my job. I just hoped that if there’s another opportunity that was coming along in 2 years, there’s a chance that I would grab it. Because let’s be honest, the expats in Dubai are in this city to find work.

Don’t get me wrong…

I am thankful that I have a job in Dubai as I can read other Pinoys who have difficulty getting work in the UAE. Also, I know that according to what everyone is going through, I just have to gain experience so that I can present a better resume when I apply for other jobs after my contract expires.

I just wished that the offer letter was more transparent. If I was employed in “good faith”, my employer would not provide a vague clause in that letter.

I have this feeling that employers can be very cunning especially on job matters. Sometimes, I also feel that most employers treat Filipinos like these cause we’re Pinoys that have this “Yes Ma’am/Yes Sir” mentality. As if we would all just agree to whatever is given to us because we need them.

I know that Europeans and Americans don’t treat employees like these. I have worked for them in the past. But that’s all I’m going to say. What I’m calling out for is simply TRANSPARENCY.

So what now?

The only option for me (in case I switch jobs) is to find government-owned companies or Freezone companies. I cannot apply to other companies that are covered by UAE Labor Law even if the salary is more than the 5000 Dirhams bracket.

In the mean time, I just need to have more TIYAGA (PATIENCE/PERSEVERANCE) as what every Filipino tells me when I share my story. Include it with “Magpasalamat ka na lang may trabaho ka…” (Just be thankful you have a job.)

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Share your opinion here.

{ 16 comments… add one }

  • Carl Soliven December 19, 2013, 2:49 pm

    Under the Unlimited contract you mentioned “You can transfer to other companies SO LONG AS your salary is at least 5000 Dirhams..” is this gross compensation or basic salary?

    Reply
    • DubaiOFW December 22, 2013, 10:46 pm

      Hi Carl, I believe that this is the basic salary. However, I’m not entirely certain. Better contact the Ministry of Labour for verification (call toll free 800 665). Hope this helps!

      Reply
  • michael angeles March 30, 2014, 12:16 pm

    hi i am unlimited contract of 2 years and i finished the contract of 2 years my questioned is if i have a ban

    Reply
    • DubaiOFW March 30, 2014, 6:08 pm

      Michael, you will ONLY have a ban IF you DON’T finish your contract. Since you finished it, there’s no ban.

      Reply
  • Zohaib June 6, 2014, 2:38 pm

    AsalamualakumDear sir I worked in construction company they told me after 2 months we don’t need engineer. Then I registerd case in Labour.Now the will cancel my visa but my question is that the company can impose immigration or Labour ban on me I am on unlimited contract not complete my probation period.Sir plz reply meRegardsZohaib HassanCivil EngineerThanks

    Reply
    • DubaiOFW June 13, 2014, 10:39 am

      @Zohaib: If the company is the one that terminates you because they don’t need you, then you should be able to lift the automatic ban. All you have to do is call the ministry of labour and talk to them about your situation. You will be given instructions on how to lift your ban.

      Reply
  • Muhammad Salman June 14, 2014, 4:10 pm

    Dear Sir,
    I work in Construction Co since Oct 2013 as a Document Controller (Follow Up Clerk), The Contract is for unlimited Period. I want to switch from this Co to new One, but my Qualification is Intermediate (Higher Secondary School Certificate). Please let me know about this status, if I moved from this Co to the other Co, or if Present Co will terminate me, what is the status, whether I got new visa from new Co or not??
    Some1 told me u have automatically banned for 06 month, & also the remaining time period of 24 month as well. & also knowing from some1 that if your qualification is under Graduation or the new Co will offer less then 5000/- you will be banned.
    Is that good for me that Present Co ll terminating me or I gave resignation to my Present Co.
    I will look forward to your kind cooperation.
    Thanks & Best regards
    Muhammad Salman
    Document Controller

    Reply
  • Ehsan June 19, 2014, 11:32 am

    dear sir
    i was working in a general trading company under limited contract and got terminated 6 month before the contract finished i have read by law im eligible to get 3 months compensation but they are offering me 1 month by saying it is mentioned in offer letter and they are also deducting some amount from absconding debtors. so please guide me should go for a case because financially i cant have a lawyer.please guide

    Reply
    • DubaiOFW June 19, 2014, 8:41 pm

      hi sir, much better if you call Ministry of Labour to check what options you can do to file a case. Their number is 800 665

      Reply
  • mahroos Hifni June 19, 2014, 9:52 pm

    Hi sir
    I’m from sri lankan
    As a guard I come to work in abudhabi
    Two months and 20 days now in uae
    My problem its until now my employer
    didn’t apply my psbd (private security buisness department) exam.
    I ask what reason they telling to me my agent not send my certificate
    My quisten is
    I xchange take any leegle action?
    My company not provide me my laber card or emirates id
    Just they provide me 2000 dirahms training allowance
    My basic salary is 2000 dirhams
    My company can traminate me or send back to home
    My contract is unlimited
    please help me
    I can take any leegle action
    Thanks
    sscertificate not come.from my sri lanka agent.

    Reply
    • DubaiOFW June 23, 2014, 7:59 am

      Maybe it’s still in process (your labour card). as for the emirates ID, you should be able to process it yourself. As for any legal action, much better if you contact MOL for this. Because if you are getting the salary you agreed, then I’m not sure what’s the purpose of the security certificate now.

      Reply
  • kathr June 21, 2014, 5:43 am

    dear sir,
    i working Dubai company LLc two month only . the limited period my visa status job follow up clerk company give other job . i cannot this work i give resignation letter company ask to me Amount 8000 Aed my problems. how to i will pay situation.

    Reply
    • DubaiOFW June 23, 2014, 7:57 am

      @kathr: please contact the ministry of labour for this and seek for advice. have you signed a contract. the labour contract from MOL? if you have, then you should really ask what to do from the MOL.

      Reply
  • Philip June 25, 2014, 5:55 am

    Dear Mr. Deepak,
    Could you clarify below?
    I am completed 15 years in a limited contract, if I resign or employer terminate, require notice period for both the parties how it counts and what will be the calculation of gratuity?
    Philip

    Reply
  • zameer June 30, 2014, 7:59 pm

    Hello sir, i am working in private sector from last 2 yrs 5 month. With limited contract.
    In my contract three conditions are mentioned.1.three month notice period before cancellation
    2.second party (me) can not work for 2 years after cancell
    3.cannot work for same competitor for 2 years

    I did not sign, and aftet many argument manager told me that this is our md instruction. So i do not want to conflict ,finally i signed…now i am worrying that suppose if i get better opportunity is this above condition trouble me. Kindly let me know..i would be greatfull to you….

    Reply
  • hariharan July 9, 2014, 10:11 am

    dear sir,
    I am not finished 2years in current compnay , but they promoted me from one job to another on these 20 months.That means they changed my visa from sales to sales supervisor. Anyway if get good offer , i would like to join other company by giving 30days notice of resigantion ……..it is possible or not.i am basically a bsc graduate…….kinldy give humble reply to me.

    Reply

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