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Source: UAE MoHRE
An employee can be hired on a fixed-term employment contract for up to three years. The term may be extended or renewed for a similar or shorter duration.
If the contract is not renewed or extended upon its expiry, and the parties continue to perform the obligations of the contract, the contract is then considered renewed under the same terms and conditions as those of the original contract.
The law also stipulates that unlimited employment contracts are to be converted into fixed-term employment contracts, in accordance with this decree law, within one year of the effective date of the existing contract and may be extended by the Cabinet for further periods as required in public interest.
A new employee’s probation period must not exceed six months or be extended for another term. When the employee completes the probation period and continues in service, the probation will be calculated as part of his service.
If the employer wants to terminate the employee for any reason during the probation period, he has to give 14 days’ prior written notice.
Employers are permitted to include non-compete restrictions in employment contracts. These restrictions must be limited to the extent necessary to protect the business’ legitimate interests and defined in respect of time, place and the nature of work. The maximum restrictive period is for two years from the date of the expiry of the employment contract.