For many employees, HR teams and business owners, the phrase “unlimited contract vs limited contract” in the UAE still appears in offers, conversations and online searches, even though the legal framework has changed. The current federal Labour Law for the private sector abolished new unlimited contracts and made fixed‑term (limited) contracts the standard model for MoHRE‑regulated employment relationships. EGSH helps individuals and companies navigate these rules in practice when preparing, converting or renewing contracts.
This article provides a practical explanation of the UAE's 2026 private-sector Labour Law. It outlines the legislative timeline, defines a limited (fixed-term) contract, explains the fate of old unlimited contracts, compares the two models in plain language, highlights exceptions in the semi-government sector, and provides a checklist for employees and employers.
How UAE Labour Law Changed: From Unlimited to Fixed‑Term Contracts
The current framework for the private sector is Federal Decree‑Law No. 33 of 2021 Regarding the Regulation of Employment Relationships, as amended by Federal Decree‑Law No. 20 of 2023. This regime took effect on 2 February 2022 and replaced Federal Law No. 8 of 1980 for most private‑sector employers. The UAE Government’s official portal refers to these combined texts as the UAE Labour Law for the private sector.
Under this regime, the UAE SDGs VNR report and official labour‑law pages explain that the law abolished the “unlimited” type of contracts for the mainstream private sector and allows only fixed‑term contracts. These contracts must be registered with the Ministry of Human Resources and Emiratisation (MoHRE) and serve as the basis for work permits and labour relations within the MoHRE system.
Key Legislation Since 2021
Decree‑Law 33/2021 introduced a new structure for the regulation of private-sector employment relationships in the UAE, including various work models (full‑time, part‑time, temporary, flexible, and others) operating under a unified set of rules. It expressly repealed Federal Law No. 8 of 1980 for the private sector, which had previously recognised both limited and unlimited contracts.
The subsequent Federal Decree‑Law No. 20 of 2023 amended specific provisions of Decree‑Law 33/2021, while maintaining the core principle that employment contracts must be for a fixed term. The government’s labour‑law pages confirm that, as of 2026, the UAE's labour law employment contract types for the MoHRE‑regulated private sector are all based on fixed‑term agreements, regardless of the chosen work model.
Removal of the Three‑Year Cap on Contract Duration
Article 8(3) of Decree‑Law 33/2021, as originally issued, required that an employment contract be concluded for a specific term not exceeding three years, renewable for the same or a shorter term one or more times. MoHRE’s media statement of 7 October 2022 later announced amendments removing this statutory cap on duration.
MoHRE clarified that contracts must still specify a definite term, but the law does not set a maximum term. Instead, the employer and worker agree on the length of the contract, and it remains a fixed‑term contract under the law even if the agreed period is long. This is the context in which practitioners now discuss the UAE Labour Law 33 of 2021 contract duration.
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What Is a Limited (Fixed‑Term) Contract in the UAE in 2026
As of 2026, all standard private‑sector contracts registered with MoHRE are fixed‑term contracts. In everyday language, this is still widely called a “limited contract”, and the terms “limited” and “fixed‑term” refer to the same legal concept under the current law. The key characteristic is that the contract clearly states a start date, an end date, or a defined duration.
The UAE Government’s Arabic page on employment contracts explains that these fixed‑term contracts can be extended or renewed by agreement for one or more similar or shorter terms. If both parties continue to implement the contract after its expiry without signing a new agreement, the original contract is treated as extended under the same conditions.
Definition and Main Features of a Fixed‑Term Contract
Under the fixed-term contract UAE labour law framework, a limited contract is an agreement that:
- is in writing,
- specifies the job, workplace and wage,
- states a definite term or duration, and
- is registered with MoHRE as part of the work‑permit process.
The government portal states that this type of contract is now the only standard model recognised by MoHRE for ordinary private‑sector employment. Core protections such as leave entitlements, rest days, and disciplinary procedures are linked to the employment relationship itself, not to any remaining informal labels, such as “unlimited,” that may still appear in older paperwork.
Duration and Renewal After the Removal of the Three‑Year Cap
After the removal of the three‑year statutory limit, parties can agree on any contract term that suits the nature of the work, provided that it remains a fixed term. There is no UAE labour law fixed-term contract maximum duration set in the text; instead, the law focuses on ensuring that the term is clear and that renewal or non‑renewal follows the procedures in Decree‑Law 33/2021.
If a fixed‑term contract expires and both sides wish to continue, they can either sign a new contract or rely on the rule that continuing work without a new agreement results in the contract being deemed extended on the same terms. Employers should ensure their internal HR processes track expiry dates, while employees should understand whether their contract is being formally renewed or simply extended by continued performance.
Relationship Between Work Models and Fixed‑Term Contracts
The Labour Law distinguishes several work models but does not create separate contract types for each. Full‑time, part‑time, temporary, and flexible work are all implemented through fixed‑term contracts that specify the model to be used and the agreed working pattern. For example, a part‑time employee will still have a fixed‑term contract stating the duration and the reduced weekly working hours.
MoHRE’s systems and templates for a MoHRE employment contract in the UAE, therefore, focus on recording the fixed term and the work model within a single unified framework. Whatever model is used, the contract must comply with the federal standards on topics such as maximum normal working hours, overtime conditions and rest days.
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What Happened to Unlimited Contracts in the UAE Private Sector?
Under the repealed Federal Law No. 8 of 1980, employers could choose between limited-term and unlimited-term employment contracts, and many employees continue to refer to pre-2022 arrangements using this terminology. The introduction of Federal Decree-Law No. 33 of 2021 restructured the contractual framework, which has led to ongoing questions about how earlier contracts are treated in 2026.
Under the current regime, unlimited-term contracts entered into under the former law remain subject to the provisions of Decree-Law No. 33 of 2021 and its amendments. Employers were encouraged to update existing contracts to align with the new fixed-term structure during the transitional period, particularly when contracts were renewed or amended.
However, there is no blanket requirement that every pre-existing unlimited contract must be retroactively converted in the absence of a formal update. In practice, older contracts may continue to operate until they are replaced, renewed, or formally amended in accordance with current labour regulations.
How Unlimited Contracts Used to Differ
Historically, an unlimited contract in the UAE was an open‑ended agreement without a specified end date. It continued until the employer or the employee lawfully terminated it, subject to the then‑applicable rules on notice and end‑of‑service entitlements. This structure gave the employment relationship a different emphasis: continuity was presumed unless one party took steps to end it.
By contrast, a limited contract under the old law focused on the agreed term and its expiry date, and some rules, such as termination and compensation, differed between the two categories. Many of these distinctions are now of historical interest only, because the current Labour Law no longer issues new unlimited contracts in the MoHRE‑regulated private sector.
Conversion to Fixed‑Term Contracts and MoHRE Deadlines
The UAE Government’s portal notes that employers were required to convert unlimited‑term contracts to fixed‑term contracts within one year from 2 February 2022, with the Cabinet empowered to extend this grace period. MoHRE’s media statement on 30 January 2023 then extended the MoHRE deadline for converting unlimited contracts to 31 December 2023.
According to MoHRE, this extension was intended to give private‑sector employers sufficient time to regularise all old contracts in the electronic system. As of 2026, new unlimited contracts are not provided for in the governing legislation, and any pre‑existing unlimited arrangements falling under MoHRE’s jurisdiction should have been converted into fixed‑term contracts in the ministry’s records.
What It Means for Employees With “Unlimited” in Old Paperwork
Some employees still hold printed contracts or HR letters describing their role as under an “unlimited” contract. Legally, however, those relationships are now treated as fixed‑term under Decree‑Law 33/2021 and its amendments, even if the internal label has not been updated on every document.
If your paperwork still uses the older terminology, you can ask HR how the contract appears in the MoHRE system or check through official digital channels. From a rights perspective, the substantive rules on working hours, leave, termination and end‑of‑service are applied under the current Labour Law, not the repealed 1980 law. EGSH can assist in clarifying contract status and coordinating any required updates with the relevant authorities.
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Limited vs (Historical) Unlimited Contracts: Practical Differences Explained
Many workers still ask what the difference is between a limited and unlimited contract in the UAE, even though new unlimited contracts are no longer issued in the mainstream private sector. Comparing the current fixed‑term model with the historical unlimited model helps explain how expectations around duration and termination have shifted. At the same time, core protections such as standard working hours and leave now apply uniformly.
Under Decree‑Law 33/2021, the usual maximum working hours for most private‑sector employees are eight hours per day and 48 hours per week, regardless of whether your earlier contract was once labelled limited or unlimited. These rules apply equally to converted contracts and to those originally signed as fixed‑term contracts under the new regime.
Duration and Renewal: Fixed Term Versus Open‑Ended
Under the current law, every contract has a defined term, and renewal is a conscious act by agreement, either through a new contract or through continued work that extends the existing one. This shifts the focus of the employment relationship to the agreed duration and to how the parties handle expiry and renewal.
Historically, an unlimited contract lacked an end date, so the relationship was understood to continue indefinitely unless lawfully terminated. This meant that questions about future employment centred on dismissal, resignation or mutual agreement, rather than on contract expiry. Today, employees and employers under the UAE 2026 limited contract framework primarily manage continuity by tracking and negotiating renewals.
Termination and Notice Under Old and New Regimes
Under the current UAE labour framework, termination of a fixed-term employment contract is governed by statutory rules on notice periods, lawful termination, and any applicable compensation, taking into account the agreed contract term. Termination may occur before the expiry of the term or by non-renewal, and both scenarios are regulated under the law.
Under the previous 1980 Labour Law, termination of unlimited contracts was also subject to notice and end-of-service principles, and the core concepts of notice and gratuity calculation were broadly similar. However, the earlier regime differed in its procedural structure and classification of contracts, which is why it no longer applies to private-sector employment under MoHRE. For disputes or terminations in 2026, parties should rely on Federal Decree-Law No. 33 of 2021, its implementing regulations, and current guidance, rather than outdated interpretations.
End‑of‑Service Considerations and Service Continuity
End‑of‑service benefits are now determined under the current Labour Law, which applies uniformly to MoHRE‑registered private‑sector employees, regardless of how their previous contracts were labelled. For workers who moved from an old unlimited contract to a fixed‑term contract during the transition, service is generally considered continuous under the new framework.
The practical question for many is how end-of-service issues for limited- and unlimited-contract employees in the UAE are handled after conversion. In broad terms, the focus is on total years of continuous service and the rules in Decree‑Law 33/2021, not on whether the relationship began under a limited or unlimited label. For specific computations, employees and employers should rely on official calculators or professional advice.
| Aspect | Fixed‑Term Contract Under Current Law | Historical Unlimited Contract Under Repealed Law |
|---|---|---|
| Duration | Specific term agreed by parties; no statutory maximum | No end date; continues until lawfully terminated |
| Renewal / Continuation | Renewed by agreement or deemed extended if work continues | Continuation presumed without need to renew |
| Termination Focus | Ending before term or choosing not to renew | Ending an open‑ended relationship |
| Administrative Treatment | Recorded as fixed‑term in MoHRE system | Converted to fixed‑term in MoHRE records, if still active |
Special Cases: Semi‑Government and Other Regimes Where “Unlimited” May Still Appear
The discussion above concerns the mainstream private sector regulated by MoHRE. Semi‑government entities and some other organisations may be subject to different legal frameworks, which can affect contract terminology and rules. The UAE Government’s explanation of working in the semi‑government sector highlights that such entities may follow Federal Law No. 8 of 1980, specific federal or local HR laws, or rules set in their founding legislation.
In these contexts, older classifications such as limited versus unlimited contracts can still be used, depending on the applicable HR regime. Employees should therefore not assume that the private‑sector rules described in this article automatically apply to semi‑government, government‑owned or special‑law entities. Instead, they should verify the exact law and internal regulations governing their organisation and, where necessary, obtain specialised advice.
Overview of Semi‑Government Employment Frameworks
Semi‑government entities may be established by federal or emirate‑level legislation that sets out bespoke HR systems. Some follow adapted versions of the old federal Labour Law, while others operate under public‑sector‑style HR codes. These systems can have different rules on contract types, durations, benefits and dispute resolution.
Because of this diversity, a job offer from a semi‑government employer might still refer to an “unlimited” contract even though the standard MoHRE private‑sector system no longer issues such contracts. The meaning and legal effect of that term depend on the specific HR framework in force for that entity.
Why Contract Terminology Can Differ Outside the MoHRE‑Regulated Private Sector
Terminology in HR documents is not always aligned across sectors. In semi‑government settings, “limited” and “unlimited” may be used as convenient labels with definitions contained in internal policies or specific HR laws. In some free zones or special regimes, local rules may also shape contract structures, even if federal labour principles are broadly reflected.
Because EGSH focuses on procedures with federal and Dubai authorities, including MoHRE, it can assist with contracts that fall squarely within that system. For semi‑government or special‑law entities, workers and HR teams should crosscheck the applicable regulations and, if needed, consult the organisation’s legal or HR department for accurate interpretations.
Checklist for Employees and Employers
As of 2026, the practical question is not whether you have a limited or unlimited contract in theory, but whether your contract complies with the fixed‑term structure mandated by the Labour Law. The following checklist provides concrete points for both employees and employers to review before signing, renewing or amending contracts. EGSH’s consultants can assist in reviewing documentation, confirming MoHRE records and coordinating any necessary corrections with the authorities.
This section translates the legal framework into everyday checks without replacing legal advice. It is particularly useful where HR documents still use legacy language while the MoHRE system reflects only fixed‑term contracts.
Questions Every Employee Should Ask Before Signing or Renewing
Before accepting an offer, ask whether the contract is registered with MoHRE as a fixed‑term contract and what exact dates or duration are recorded. If your offer letter refers to an unlimited contract UAE 2026 arrangement, clarify whether this is just informal wording and how the contract will actually appear in the MoHRE system.
Check how renewal works: does the contract state that it will be renewed automatically, require express agreement, or rely on continuation of work after expiry? Confirm the working hours and rest days, bearing in mind that standard private‑sector rules set maximum normal hours at eight per day and 48 per week. If your previous contract was unlimited, ask whether a new fixed‑term contract has been issued as part of the conversion process.
Points for Employers to Review for Compliance and Transparency
Employers should review their templates to ensure they clearly state a fixed term, use wording aligned with Decree‑Law 33/2021 and its amendments, and are consistent with the entries made in MoHRE’s electronic systems. References to unlimited contracts should be removed from standard templates used for the MoHRE‑regulated private sector to avoid confusion.
From a compliance perspective, HR teams should verify that all historical unlimited contracts were converted before the end of 2023 and that renewals are handled in accordance with how the contracts are registered. Ensuring that staff understand their contract duration, renewal mechanisms and key rights supports transparency and reduces the risk of disputes. When needed, EGSH can coordinate with MoHRE on behalf of employers to regularise records and streamline contract administration.
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Understanding Contracts Under UAE Labour Law
For the MoHRE‑regulated private sector, the standard model today is a fixed‑term contract, often still called a “limited” contract in practice. New unlimited contracts are no longer created under this framework, and historical unlimited contracts have been regularised as fixed‑term agreements in the MoHRE system.
While the labels have changed, core protections such as working hours, leave, and general employment standards remain in place under Decree‑Law 33/2021 and its amendments. Understanding how your contract’s term, renewal provisions and registration status fit into this framework is more important than the historical terminology once used. For authoritative updates, employees and employers should consult the UAE Government portal and MoHRE, and may seek procedural support from centres such as EGSH.
FAQ
What happened to unlimited contracts in the private sector of the UAE?
Unlimited contracts in the MoHRE‑regulated private sector were a feature of the repealed Federal Law No. 8 of 1980 and are not provided for under Decree‑Law 33/2021 and its amendments. Employers were required to convert active unlimited contracts to fixed‑term contracts, with the transition deadline extended to 31 December 2023. Private‑sector contracts registered with MoHRE should all appear as fixed‑term contracts in the ministry’s system.
Is an unlimited contract still valid in the UAE in 2026 for private‑sector jobs?
For mainstream private‑sector employers under MoHRE, new unlimited contracts are not available in 2026 because the current Labour Law allows only fixed‑term contracts. Existing relationships that started under unlimited contracts have been regularised within the fixed‑term framework and are governed by Decree‑Law 33/2021 and its amendments. In other sectors, such as some semi‑government entities, different HR laws may still use the term “unlimited”, so employees must check the applicable law for their employer.
What is the difference between a limited and an unlimited contract in the UAE under current rules?
Under today’s Labour Law, all MoHRE‑registered contracts are fixed‑term, so the legal distinction mainly has historical relevance. Previously, limited contracts had a specified term while unlimited contracts were open‑ended; termination rules and some compensation concepts differed between the two. Now, the key focus is on how the fixed term is agreed, renewed and terminated under Decree‑Law 33/2021, rather than on choosing between two contract types.
Can I still sign an unlimited contract in the UAE with a private‑sector employer?
If the employer is regulated by MoHRE, new contracts must be fixed‑term, and MoHRE’s standard templates and electronic systems are based on this structure. An offer letter that refers to an “unlimited” arrangement in 2026 should be clarified, as the underlying MoHRE contract will, in practice, need a fixed term. In semi‑government or special law entities, the answer depends on the HR regime established in their founding legislation.
How to convert an unlimited contract to a limited one in the UAE if it is still on paper?
Administratively, conversion is handled through the MoHRE electronic system by issuing or updating a fixed‑term contract that reflects the ongoing employment relationship. Employees can ask HR whether this step has already been completed and may check their status via official MoHRE channels. Employers that have not yet regularised old records should coordinate promptly with MoHRE or work through a services centre such as EGSH to ensure compliance.
Do unlimited contracts still exist in the private sector in the UAE after the 2023 deadline?
For MoHRE‑regulated employers, any active contracts that were previously unlimited should, by law, have been converted to fixed‑term contracts by 31 December 2023. The UAE Government’s guidance states that the provisions of the new Labour Law apply to relationships that originated under the old law, meaning they are treated within the fixed‑term framework. If records still show an unlimited label, this generally indicates an administrative update is required rather than the survival of a separate contract type.
How does the UAE's 8-hour-per-day rule for the private sector apply to old unlimited contracts?
The standard rule of eight hours per day and 48 hours per week for most private‑sector employees applies regardless of whether a worker’s earlier contract was limited or unlimited. Once Decree‑Law 33/2021 took effect, these working-hour provisions applied uniformly to all MoHRE‑regulated private‑sector employees, including those whose contracts were later converted. Any exceptions or sector‑specific adjustments must be based on the current Labour Law or related regulations, not on the historical contract label.
What is meant by the UAE Labour Law 2026 limited contract in the official guidance?
When official sources refer to a UAE Labour Law 2026 limited contract, they are describing the fixed‑term employment contracts required under Decree‑Law 33/2021 and its amendments. Such a contract must specify a defined duration, be renewable or extendable by agreement, and be registered with MoHRE for the private sector. This model has replaced the previous system of choosing between limited- and unlimited-contract options for MoHRE‑regulated employers.
Explained by
Amira Ali Al Hammadi
Labour & Tasheel Services Consultant at EGSH
Amira Ali Al Hammadi is a specialised service provider with nine years of experience delivering MOHRE-related Labour and Tasheel services. Her professional expertise covers establishment and employee procedures, including renewals, cancellations, amendments, fine payments, employment contracts, and compliance support for companies of all sizes.
This article is intended to provide general information based on official UAE sources, and does not constitute personalised legal advice. Before acting, applicants should verify the current rules and fees directly with the relevant authority or an authorised service centre.
