Difference between Offer Letter and Labour Contract

Difference between Offer letter and Labour Contract

So you have landed a job! That’s great news. Companies usually express their desire to employ you with an ‘Offer of Employment‘ letter on the letter head. This is an indicative letter that you have passed the interview and have been selected to work in the company. However, there are few more procedures that you will have to follow to actually start working for a company.

offer letter and labour contract

These other procedures are:

-Labour Approval/Labour Card/ Labour Contract
-Employment Visa – Entry Permit
-Medical Test
-Emirates ID
-Employment Visa Stamping

At the time of obtaining offer letter from company, you are not yet legally authorised to work for the company.

First step the company needs to take is to apply for labour approval with Ministry of Labour which will grant you the permission to work in UAE. At this stage, if your quota is approved, you will be presented with the Labour Contract which will be official agreement between you and your company. This is generated by Ministry of Labour and mentions all the clauses applicable to your employment like your salary with break up, type of contract, Designation and any other terms and conditions. Your Offer Letter, after this point has no validity in the eyes of the Labour Law. Labour Law of UAE is the ultimate document that will act as guiding document for any employment related queries and terms.

Article 7 of UAE Labour Law mentions: “Terms inconsistent with the Provisions of this Law including those whose effective date may precede the enforcement of this law shall, unless they are proved more beneficial to the worker, be deemed null and void.”

What this means is that Labour Law is the document that will be followed in all cases even if the offer letter has other clauses, terms that are not in conjunction with the Labour Law. The Law further states that, if the offer letter terms are of higher benefit to the worker than that mentioned in the Labour Law, Offer Letter terms may be applicable.

Many of us are still confused as to what to consider, whether Offer Letter or Labour Contract? I would say, you must have the copy of your labour contract as well as a copy of UAE Labour Law handy and familiarise yourself with the Terms.

Note: Government Organisations do not issue Labour Contracts as they do not come under the purview of MOL. However, they do issue Employment Contract, clauses in which are applicable. Further, they may also have internal policies or may follow provisions in the UAE Labour Law.
Free Zones too, do not provide Labour Contract through MOL. They usually have Contracts generated by the respective Free Zone authority. They may also follow provisions of UAE Labour Law with regard to gratuity and so on. You need to make sure that these clauses are clearly mentioned in the Employment Contract generated by the Free Zone authority.

About Deepak 505 Articles
Deepak is a passionate blogger with interests in bitcoin, online marketing, and writing.

54 Comments

  1. Can i ask a question?
    Am working in freezone and i have signed a 2years contract but i already finish 1year4months.so am planing to change a new job but outside of freezone.is it possible to bring an offer letter from outside freezone to my company?

  2. I just signed an offer letter from a water company in Dubai, now the problem is I only signed 1 copy of the offer, not two as suppose. That’s 1 for me and 1 for the company, I only have my own copy and the company doesn’t have theirs, this have been bothering me… pls I need a response

  3. Hi Deepak,

    In Mar 2015 i got a job as planning Engineer in dubai that time i signed offer letter and in offer letter it is mentioned that contract category : 4 years limited contract.
    Now i completed 2 years in company and my limited 2 years labour contract expired on 28.02.2017 as well as my visa is also going to expire on 30.03.2017 but my company is not ready to release me and they are saying i have signed offer letter for 4 years so i have to work for 4 years or else they will put ban on me.

    It is possible that company can put ban based on offer letter ?
    Is offer letter clause valid as per UAE labour law?
    if company delays my cancellation, what should i have do?

  4. Hi,

    I am nursery teacher by profession. I have two questions:
    1) I worked for a nursery for 5 yrs in Dubai and until now they have not given me a copy of either offer letter or contract agreement. I recently resigned and expecting to receive my final settlement but the management has refused to give us a copy of the offer letter or contract agreement. Is there any clause which says that the employee has the right to ask for a copy of the contract signed by both parties?

    2) The school gave me a training where the school paid the fees. and after my resignation the school refused to give me the original certificate saying that i didn’t give 2 months notice period as per contract. I gave notice period of 15 days and handed over all my responsibilities to the new teacher. Please note that after the successful completion of training I served school for 3 years. Is there any provision in UAE labour law which can help me in securing my certificate?

  5. Sir,please i signed offer letter for the past 2months now but i haven’t received my visa for how long will one wait for the visa to be out

  6. Hi Deepak,
    I have been working in a co with unlimited contract since may ,2015. They have been paying the salary late by two months. So I decided to resign.
    1 how long it will take, if I resign?
    2 can they ban me?
    3 should I pay 45 days salary to them ?
    4 shall I get leave salary, air ticket, gratuity?

    Plz reply
    Respectfully

  7. Hi deepak i signed one offer letter which validity date is one month of February so can u tell me if they will not give any visa so what i should do against them assist me

    • Hello sir,
      I got a offer letter and also contract letter from a company in Abu Dhabi dated on 05.07.2016. Since, the Employment visa has not been received from company. I have send a mail three times to company, but they are not given proper response company side. They told me wait for next week and next week but now almost 5 months completed. You are requested to kindly suggest to me what can i do complain against this company. your response is required urgently.

    • Hello Sir, My appointment letter said 3 months of notice period but DMCC’s unlimited period contract has 1 month of notice period. My employer has terminated me abruptly. Will I get 1 month notice period or 3 months. Indeed, employer will prefer 1 month but can I get 3 months as given in the appointment letter.

  8. A month a ago I got a job offer as a manager in dubai. But I have not signed any offer letter. After reaching india they asked me to send my passport copy and the photograph.
    Now they are saying they got the approval on my name.and they will send labour contract by mail which I have to sign and put tumb impression and send it back to them.
    My question is, is it possible to get visa approval without me signing offer letter

  9. Hi Deepak,

    I need to get some information. I joined a company under unlimited contract in April, 2016 and now I have completed 6 months probation but my labour card was issued in August, 2016. Am I eligible of getting the benefits from the company( Leave salary for 6 months that I have worked)?

  10. Hi Deepak,

    I need to get some information. I joined a company under unlimited contract in April, 2016 and now I have completed 6 months probation but my labour card was issued in August, 2016. Am I eligible of getting the benefits from the company( Leave salary for 6 months that I have worked)?

  11. Hi..

    I Have signed the offer letter from a company.Then few weeks they ask me to sign the contract and i have noticed that the salary is differeny from the offer letter that i have signed before.Will they give the salary based on my offer letter or what is in the contract?

    Another thing.How long will it take for the work permit to be released after signing the contract?.thanks a lot

  12. Hi deepak, I got a offer letter from Al khayat contracting llc dubai for the position of office accountant letter dated on 05.06.2016. Since, the Employment visa has not been received from company. I have send a mail three times to company, but no response has been received from company side. You are requested to kindly suggest to me what can i do complain against this company. your response is required urgently.

  13. Hi Deepak,

    I joined my company in august 2009 in dubai head office where my contract expired in august 2012.. I renewed it in dubai and after 6 months my visa was cancelled and i got new visa from same company in abu dhabi as a branch in may 2013 for 2 years which expired in may 2015 and renewed more for 2 years which will expire in may 2017.

    I have given my resignation.

    I am confused if you can clarify to my below questions:
    1) my continious service with comapny is now 7 years from joining (3+2+2) but due to visa change in between there is different visa stamps of head office n branch, am i liable to pay penalty?
    2) when my visa expired in may 2013 i have not signed any agreement for further period, on MOL website also contract is old. Is my contract becomes unlimited?
    3) also my contract salary is far less than what i actually receive, should i have to pay penalty of 45 days on contract salary or actual salary drawn?

    Regards,
    Nirav

  14. I just signed the labour contract 1 day back, if the labour contract salary is different then the Company Offer letter, can I make a complaint? Because I didn’t get a chance to read the labour contract completely before singing it?

    Please advise.
    Thanks

  15. Dear, i am working in a hospital as clerk for last one month,now i got a good job in another hospital with good package. Can i join in new hospital by breaking my contracts. What are the steps to follow while i break this contract. At present i have signed for a 2 year contract. Please help me waiting for your reply

  16. Hi deepak I got job offer later from llc company 60 day’s completed till now I didn’t get any information about my work visa visa will come or not

  17. Hi,
    I am working in a LLC company in Dubai for the last six months. Before my joining they have issued me an offer letter i.e. 7 months back and now they have issued an another offer letter by changing my basic salary and other things. Is it legal. Can I accept this revised offer letter. Kindly advice.
    Suresh

  18. Dear Mr. Deepak,

    Good day!

    I am on a husband’s visa. I have already rendered 1 year service of my 2 years limited contract. It is stated in the Labour Contract that I need to give 2 months notice period if I want to resign. Is it okey if I will just give 1 month notice? Am I going to pay the company 1 month salary if I will resign immediately?

    Thank you so much.

  19. 2 month ago, I had a offer from company X, so after that i signed to the contract and resigned from company Y. After notice period, before getting my visa cancelation, I had another dream job from company A better than company X.
    I did not give company X my cancelatuon, and my passport. They did not start the visa procecc.

    My question is

    How can I cancel the offer from company X?
    If I tell them that i found the better job, will they do some problem to my careeers?
    What is the labout law about this case?

    Please, i would be happy if you reply me as soon as possible.

    I am very confused.
    Help me.
    Thank you so much

  20. Hi. We only signed the offer letter from the company and still awaiting for the contract. But then, we decided to pull out our application because its taking too long already. But then the company hold all our documents including passport. They even told us that they can ban us in the UAE. Is it possible? Thank you.

  21. Hello sir.
    Iam working in a gift shop from since 9 months
    My education is intermediate if i cancel my visa in January 2016 i will face labour ban.

  22. My father was dead in dubai campany and we dont now how to claim the insurance can you give informatin to us

  23. I am working im mc downels resturant since 5 month..mi dont want to work here any more…can i try for new job and left the company…. did they band me for six month or not…

  24. Hi deepak. I just recently signed an offer letter from company 1. After a few days I got another offer from company 2, that has a better package.

    The questions is

    Is it possible to inform company 1 that I will not be continuing the emploment process since I got another better offer from company 2?

    could there be any legal ramification that company 1 impose on me for not honoring the offer letter?

    Thanks

  25. Hi deepak

    Wanted to know in my terms of employment with the offer letter it is mentioned if you leave the company in 3 yrs uve to pay 15000 to them n if u leave after 6 yrs ull have to pay 12000.I Wil finish my visa in jan n completed 5 years.Can they ask me to pay money or ?. But in my labour contact its not mentioned anything bout this money.have a Ltd contract.

    Pls help

  26. Hi..I am workimg for 2 years and 10 months in a company under limited contract,,my boss is the one who terminated me due to misunderstanding. Will i have ban ? My boss didnt impose a ban on me but will the labor or immigration can since its under limited contract.Thanks

  27. Hi Deepak,

    I am employed with a Contracting LLC company in Dubai. my contract its limited (2years). my position sales executive . I want to cancel my contract. but my manager said if i cancel before two years i have to pay money.do u can inform me it’s true or no? second: if i cancel my contract i cant found 6 months job in dubai? coz i dont have diploma? third: my passport with company. when i ask to return back, they told me,passport with us!coz such is the law in Dubai.plz informe me.
    thanks

  28. hi deepak,

    Sir, am very much impressed with your dedication in helping your fellowmen… may your descendants be blessed much more am so happy finding this page.

    I also have my personal situation am facing right now in which am confused on what to do! hence your guidance is very much sought.

    I am employed with a Contracting LLC company in Dubai having a position of civil engineer with an unlimited contract , I was employed last April 2014. Come October, November, December of the year 2014 (3 months the company failed to pay my salary). Last December 2014 i ask for my salary and passport from my manager (my passport was on his position since the i started work and it was my scheduled annual vacation to be at my home country which my manager agreed during interview) . But he only handed to me my passport with a promise to send my unpaid salary to my home country together with my ticket going back to UAE. With that condition I fly out from Dubai last December 27,2014.after a few days I arrived back to my country I made so many follow up regarding my salaries (calls and SMS) no positive action done he (manager)always promise to send salary and ticket ,then until June 23,2015 (almost Six months I left UAE) I decided to book a ticket at my expense back to Dubai . The following day upon arriving Dubai, I talk to my manager about the status of my salary in which in return he just gave me a check worth (12%) percent of my total collectible in a form of check with an instruction not to incash it with-out his knowleged because if limited funds in the account. with that situation I have decided to make resignation letter (the letter includes the reason of my resignation is due to non-payment of salaries and the events as per stated above) last July to take effect august 2015. I already got an NOC from the company stating that they don’t have any objection on my intention that I will look for a new job.
    Question:
    1. Since I serve less than 2 years from this company , with the reason above am I still be affected with the mandatory labor ban?
    2. If yes, using the events stated above as my reason of argument is there a possibility that ban can be lifted? Since this is my first contract in this country am sure it would be hard for me to look for a 12,000 AED salary for now.
    3. Can I still collect my unpaid salaries (Note: until now the check previously issued to me is still at my hand) if yes what are the possible documents I shall prepare to strengthen my claim?
    4. Do I need a lawyer to help me on this situation?

    Please need your guidance on this matter…… how can I thank you in return. Thanks!

    • Jovi,
      Sorry for the delay in replying. I was out of station for couple weeks.
      1. If you have NOC, MOL may not impose labour ban.
      2. NA.
      3. yes, you must be paid all the unpaid salaries.
      4. May be it will help.

      • Hello Deepak,

        I am working as an Assistant Manager in LLC company in Dubai. As per the contract, working hours was 9 hours but they were asking us for more then 12 hours to work. I took a leave on emergency reason and now i came back to India.
        1). Now I don’t want to go back to UAE so will they do any legal action on me?
        2). Can they put an absconding case on me?
        3). Can they do any legal action in which I must have to go there and to start working again to the company for 2 years?
        4). If I will not go there even if they call me so can they do any legal action on me?
        5). If I will not go back so will my visa automatically cancelled?

        • Nirmal,
          1. They may file absconding report in which case, you may be arrested if you try to enter UAE.
          2. Yes.
          3. Yes.
          4. Yes.
          5. Yes, but the complaint will remain open.

          • Thanks for your reply.

            1). Now I don’t want to travel to UAE in any condition and also I will not try to re-enter in UAE so will it be problem for me in India?

            2). Please suggest me any other way in which my visa will get cancelled and also my company will not put any absconding case on me. Even if they ask me for money, then I am also ready to pay them.

            3). If I will not re-enter in UAE so will it be problem for me in India?

            4). If they put any legal case on me and if i will not go there in UAE so will it be problem for me in India? Can they force me to go there?

            5). I am requesting you to suggest me some other way to solve this problem, because i don’t want to go there in any condition.

  29. Dear Mr. Deepak

    i need to get some information if possible for you.

    I am working with a contracting company as mechanical engineer since last two & half years. i have given my resign a month before and i had received approval copy signed by Division Manager. i had mentioned one month notice period clearly with dates in resignation letter.

    Now HR has informed me that i must complete notice period of two months as it was mentioned in job offer given to me at time of joining this company and signed by me where as there is no special condition mentioned in Laour Contract & contract is unlimited.

    Kindly suggest if i have right to give notice period of one month or i must follow notice period of 2 months as per job offer accepted.

    If you can reply me then i will be really grateful to you.

  30. dear deepak! i m working with a company since last 2.5 years.i put resign and mentioned notice period of one month & i got approved resignstion signed by division manager by email.now after one month,HR told me that i should serve for one month more as as per job offer letter given to me and signed by me at time of accepting job shows that i must give notice period of 2 months in case i resign.i have unlimited contract and there is no condition mentioned in labour contract so in this case,i will have notice period of one month or two months?

    if its one month and current employee doesnt cancel and i file complain in MOL then how much approximate time does it take to sort it out?

  31. Dear dipak,
    Fisrt of all thanks for such a good information to share i have one question hope you will give a detail answer as usual
    ” i am working in a non freezone company from last one year, with unlimited contarct now after one year company want to make an internal contarct which classify my job and responsibility in my preiouse job offer latter my designation is PRO now they want to increase my responsibility like PRO + Sales + sales co ordinator and increase the duty timing form 10 to 12 hours my question is whats is the legal stauts for such internal agreement and if i refuse to sign and they terminate the standard labor contarct whats the copensation i can claim.
    Hope you will answer with your best of knowlage thaks once again

    • Abdul,
      Sorry for the delay in replying. I was out of station for couple weeks.
      Free zone companies do not come under MOL and they can have their own laws.

  32. Hi,
    I just resign this month due to some health problem. I am already more than a 1 year from the company. My problem is that they told me that I should pay the visa because I haven’t finish the contract which is AED 5000. I am on unlimited contract.

    By the way is it possible that they can delay my cancellation? They have already acceptedy resignation and by end of month is my final day as per 30 day notice. And also is there a big chance for me to win if I go to the labour and file a case incase they force me to pay the visa cost? And how long would it take if I file a case cause I don’t want to stay longer here due to expenses.

    Thanks and Regards

    Thanks and Regards.

    • Bobot,
      You need not pay any visa fees.
      Cancellation should not take more than a day.
      I can not comment on your Chances at MOL.

  33. I am working with a non-free zone organisation with a 2 year contract. I have been contacted from various organisation for a job opportunity.

    My company requires compensation of a 45 days salary, which i shall agree to abide if i do plan to move. Do i also have restrictions from the UAE ministry if i plan to move within a year.

    Please advice.

  34. Hi Deepak, my friend got an offer as a project engineer in a construction company in Dubai. But they said if he interested for 4 years agreement then they will process the offer letter. they offered 12000 and medical and they mentioned other benefits as per UAE labour law. I want to know what is meant by 4 years contract its maybe limited contract? if he want to break or leave the job within 4 years period as per labour law one year ban and compensation to company is applicable for engineer visa and salary of 12000?

    Because i am working as an engineer and my salary also 12000 , recently i resigned from one company and joined this company with good salary package. there is no ban or something but my contract is unlimited.

    Please can you clarify. , even 12000 salary engineer visa but limited contract means can change the job or no??there is any labour ban is applicable??

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