What is an Unlimited Labour Contract?

Unlimited Contract – Employment

As mentioned in my previous post about Limited Labour Contract, there are 2 types of labour contracts under Ministry of Labour UAE.

1. Limited Contract

2. Unlimited Contract

Labour Contract unlimited uae

What is Unlimited Contract?

An Unlimited Contract is one which is open ended. The contract itself has an expiry. However, it is automatically renewed at the end of its tenure unless the employee resigns or is terminated.

Why do companies use Unlimited Contract?

Unlimited Labour Contracts are more in use in UAE due to their flexibility and user friendliness. It is kind of comforting to employees that their employment contracts do not have an expiry and will be renewed at the end of the contract period. This does not mean that the employees can not be terminated and resign under Unlimited Contracts. It can happen. 

When can an Unlimited Contract be terminated by Employer?

Unlimited Contract can be terminated for following reasons:

A – Lack of desired performance on part of employees. In such cases, companies can provide 30 day notice to the employee.

B – Gross Misconduct by employee. As mentioned in Article 88 of UAE Labour Law and as per Article 120 of UAE Labor Law, an employee can be dismissed by employee citing valid reasons.

Can an employee end Unlimited Contract?

Any employee may resign from their job provided they adhere to the notice period rules. Note that employees may also face labour ban incase the contracts have not been completed. 

However, there are ways in which you will be able to avoid facing 6 month labour ban.

How is gratuity calculated if an employee resigns?

In case of Termination: Calculate End of Service Benefits

In case of Resignation: Calculate End of Service Benefits

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

75 Comments

  1. Dear Sir my boss terminated me from my job and canceled my visa by saying will complete ur dues but after tht he is refusing to complete my dues .I complained in labour office I want to know tht till wat time the solution of my problem because since last 1 Feb 2017 I am sitting idol in my room still waiting for labours appointment msg Pls let me how many days I have to wait as my visa canceled already.

  2. Dear sir
    My name is alwi shariff I sign my limited contract now seven months completed and I already find a gorvement owend company my question is will this company which I work for can they burn me after I sign the offer letter if no/yes I would like to know what to do in a very safe way .

  3. dear sir,I’m Mary grace I work since November 19,2014 in cleaning company..my contract will be finish this coming November 18,2016..my problem starting June 2,2016 I try not go home our acommodation because I was assign in Dubai nursery..and this Ramadan my manager force us to work as overtime cleaning houses..my concern she gave me las warning letter if the said offense I’ll do again she directly terminate me.and send airport..for refusing work during off day that is Friday

  4. I would like to ask because I have signed a limited contract for my second contract in the same company so technically this is my 3rdyear of working with them and I am planning to resign. Would there be any ban for me?thank you.

  5. Hello Mr.deepak
    I am writing here coz it makes sense all your reply to all the queries of all the people here who have their own problem with their visa..
    And I do appreciate your kindness of helping them
    I just wanna approach u my concer regarding my limited contract that was from feb 14 2013 until feb 14 2015.but o asked my boss to give me an annual vacation going to Philippines but she refused..and o forced him by December 26 2014 I will go for a vacation to Philippines but she said just one week.shes really tight but then I asked her to give me atleast one month..so I finished the 1 month vacation I should come back January 26 2015 but I decided no to come back coz my fiancé wanna get marry me so I informed her that I wouldn’t come back then she got mad at me and she didn’t cancel my visa in labor until now..so what I have to do if I want to go back in UAE? How can I find work if she’s still not canceling my visa in labor? Kindly give me some advise to do thanks mr deepak

  6. Hi Deepak,

    I’m working as Archives Clerk in my (Visa) with the salary of 10,000 in unlimited contract in just 3 months now, then I want to transfer to new company which will offer 10,000 same as my current employer but my new position in new company will be “Swimming Coach” my Question is:

    1. Can I lift the ban from Archives Clerk to Swimming Coach Profession
    2. is Swimming Coach under second level category ?which means I just need certificate as a Swimming Coach atleast earning 7000aed?
    3.If Im going to resign in my current employer they to have rights to imposed 1 year that cannot lifted even I’m going to get higher position?

    please help me.

    thanks

  7. Hi deepak sir,
    I am working in a tecom free zone company. And now I am terminated because company is not doing so well in its key business and they just need to cut down manpower. How to check whether my contract is limited or unlimited and what compensation should I get?

  8. Hi Deepak,
    Im under immigration visa working for a semi government bank i have joined on 8th of June 2015 and i resign my job on 3rd of August 2015 will they ban me please reply?
    Because i heard that for immigration visa no ban, is it true?

  9. Hi Sir,

    Greetings! I would like to ask what is the best thing to do in my situation.
    My employer wants me to sign in an agreement that I will go this July 31. I started working March 01, 2015, I am still probation period under Unlimited contract.
    The employer doesn’t want to give my ticket going back to my country. Since I decided that if my contract will be terminated I will go back to my country.
    Please advice. Thank you.

    • Mitz,
      Under probation, employer can terminate you without any reason.
      He must provide air ticket.

  10. Hi Mr. Deepak, i hope you can give me an advice what should i do or if i get any problem about my situation or if it’s very difficult to solve and what was the solution.

    Here’s my Situation. 2 days ago, my employer cancelled my visa to the labour because i make a complain against him that he don’t want to cancel my visa eventhough my notice period is already done for he still want me to return to his company for not getting yet the replacement for my position. and last 13th of july the labour confirmed me that its cancelled .. but he didn’t cancel yet the visa on my passport that’s why its still on process according to the labour. And now i tried to follow up to my past employer about the cancellation of my passport’s visa and he told me he will not cancel it until i didn’t get a ticket back to my home country. and he told me that he will accompany me going to the airport eventhough i already informed them that i already found a new job that will lifted my ban, and he told me if i will still stay here in UAE he will file abscondy against me. . do i have the right to cancel my own visa on passport by giving only my passport copy? since they’re holding my passport at this moment.. can my new employer still process my new visa? please explain. thank you

  11. Hi Sir,

    my visa is an unlimited one. i got a new job with a better pay. current company took visa as a profession of AUDITOR using my degree certificate. u have mentioned in removal of six months ban that if ur degree holder then the new salary should be 12000 aed. my question is now if i get 6000 aed salary in a new company can they apply my visa using higher secondary certificate so the ban can be removed and si i can happily join new company.

    Kindly Reply

    • Sneka,
      You could do that but MOL already has your details!
      Besides how is it possible to do an auditor’s work with secondary certificate??

  12. Mr. Deepak,

    I’m working for a LLC company in Sharjah and I have completed 9 months and this the 10 month. But I still didn’t get my confirmation letter, when i asked it they now wants me to leave the company.

    Please help me what should I do? And will I be getting like 2 months salary if they terminated. Or if I give my resignations what will happen.

    Please answer me.

    • Mahesh,
      Probation can not be extended beyond 6 months. That is illegal.
      If they have not provided you the confirmation letter it is their fault.
      If they terminate you without any reason, under unlimited and limited contract, you should get 3 month compensation.

  13. Dear Deepak,

    i am balasubramanian i have one question. my labour card exp: 09/06/2015 and my visa exp: 09/07/2015 now my boss told her today your visa is canceled.

    com to 6 month ban?

    Plz tell me deepak,

    Thank you,
    Balasubramanian
    050 8942710

  14. Hi deepak. I just want to ask if its valid that my company will hold my salary? I was terminated with no other reason and I supposedly finish my contract in september but the company terminated my contract. I was signed under unlimited contract and they give me 30 days notice til end of this june but according to them they will hold my salary for the month of june? is it valid?
    Thank you in advance.

  15. Hello Sir,

    i just want to ask if its possible that my boss filed a 1 year ban to me after we have settled in labour?..

    • Lorraine,
      Why do you think that will be the case.
      If it is wrongful ban, then consequences for your boss will be bad as MOL takes these things seriously.

  16. dear deepak
    i am pharmacist with unlimited contract for one year. in ras al khaimah.my salary is not paying on time and it is not through the bank.salary is giving 2 months later.the employer not started yet the wps account.what can i do.i want to change my visa with out labour bann.is it possible.will the mol allow me to live the company?

  17. sir i want to ask you that i am working here in a consultant company like an auto cad draughtsman. i’m here from feb. 2014 i have no more salary here only 1700 dhs please i want to change my visa i search another job where i get the good salary for my better future.but still i can’t complete my 2 year my contract is unlimited. so what i can do to cancel my visa because if i cancel then it’s having 6 month ban for me. please suggestion me how i remove my ban and change my company.

  18. Dear Sir,

    I am under an unlimited contract that will end this July. My residence visa will expire by October. I will not be renewing my contract anymore.

    My employer told me before that if I will leave earlier than the end of my residence visa, I will have to pay the fines she paid during the processing of my visa when I started with them. I believe paying those fines were not my fault since the delay on the processing was on my employer’s part. also it was our agreement that she will pay everything with regards to the processing of my visa. My labour contract will end by July and I will not renew with them. can my employer really demand for me to pay those fines? Will there be any consequences if I will not finish my residence visa?

    I would really appreciate your advice. Thank you.

    • Ren,
      What your employer is stating may not be correct.
      Your labour contract ends when your labour contract expires and not as per the residence visa!

  19. Dear deepak
    Im working inside the house but my visa is hotel visa i have completed two contracs which is 4yrs then i want to transfer to other employer but the owner of the hotel which is my sponsor spoke to me that i will get 1 year ban if i will transfer to other empoyer,im already sign my cancellation paper 15 days before my contract end now my question is

    1.Is it true i will be ban for 1year
    2.How about that they cancel me 15 days before my contract end do i get ban
    3.Is my sponsor has the power ask the immigration or labour a 1yr ban for me even if completed 2contract(4yrs)
    4.what is the best thing to do if i have ban can i file a case?

    thank you so much!

    • Lady,
      First of all working within another organisation is illegal.
      1. I don’t think there will be 1 year ban. However, you situation is not clear.
      2. I don’t think so.
      3. The employer must prove that there is an offence committed.
      4. You will need to speak the MOL and explain your situation.

  20. Dear Deepak,

    My current residence VISA is under Tecom Free Zone, and working for a company from last 8 months under unlimited contract. And now I am planning to change a job which is outside free Zone as I am getting higher salary, my current position is Assistant Manager and holding Post Graduate Degree, my Salary is more than AED 13000.

    I will serve one month notice period as per my employment contract.

    Can you please let me know can my employer put an employment ban in this case?

  21. Thanks Deepak, 1) Would you recommend me shifting from company visa B to company visa A, should they be persistent? I have a feeling they are trying to do the same in order to tie me down further into their company.. I have the right of refusal yes?.. and can insist on the same?
    or is there a way that the labour contract will state that it’s only an internal visa and contract change and the seniority with regards to the visa continues. As I also don’t want to be without a job or visa, should I not find amother company in time to shift to?.. so I may be forced to shift to company visa A.

    2) And just another clarification please? Contract finishes two years in july 2015, but my labour card with the company has expired, you are saying I can shift out now without any trouble with bans, yes?

  22. Dear Deepak,
    Thank you for time and effort in replying everyone’s queries, I have a few of them myself and was hoping you could clarify them for me.

    I think i am in a tricky situation and I think listening to the situation I am in and coming up with a solution may be of interest to you. I am currently employed by a Dubai company and I am on an UNLIMITED contract. I am andesigner architect employed in February 2013 under company A. They requested me to continue working on my visit visa that I was on and I did the same until they processed my visa in April, as it was a three month visit visa. I had previously signed the offer letter stating the terms under the ‘company A’. When the visa time had come they had informed me that the ‘company A’ was a dubai free zone and they owned another company in dubai LLC, here called ‘company B’. so the visa stated that I was employed for the right position except that everything including visa, labour card and contract states that I am employed for ‘company B’. And said this is of no worry to me. I had finished all the signing of the contract and had completed my medicals And obtained a labour card. And officially signed the contract in July.

    So now, May 2015, it’s been unofficially more than two years of service to them.but officially My labour card has expired (Does this mean I have completed my service?) And my employment visa on my passport gets over in july 2015 .

    The new development is that they have started another company in dubai LLC with the same name as company A and plan to shift me from my current company B visa to company A. I asked the question whether it will be a new contract and they have indicated the same so.

    I have had a decent time at working with them but just I can not be tied down for another two years with them.

    Tell me as to how I should handle the situation,
    If I want to shift before the end of the year into another company entirely? and would you advice changing my visa from company A to company B. What about gratuity?. Should I not ask them for the same prior to changing.
    Also how does probation period come into play in an unlimited contract. Can I change jobs into another company during the probation say they put me on company A visa? Is a labour ban applicable?

    Since my labour card has expired after the two year period. Can I change jobs now and not expect a ban While serving the notice period.

    And in my case what can be done to avoid a ban if I want to change jobs either way?

    I am currently earning a basic of 3k. With overall at 5K. They have given me a raise after the completion of each year. And now my salary is 7k. With basic remaining the same.

    Thank you so much for your time.
    Nick

  23. Dear Deepak,
    Thank you for time and effort in replying everyone’s queries, I have a few of them myself and was hoping you could clarify them for me.

    I think i am in a tricky situation and I think listening to the situation I am in and coming up with a solution may be of interest to you. I am currently employed by a Dubai company and I am on an UNLIMITED contract. I am andesigner architect employed in February 2013 under company A. They requested me to continue working on my visit visa that I was on and I did the same until they processed my visa in April, as it was a three month visit visa. I had previously signed the offer letter stating the terms under the ‘company A’. When the visa time had come they had informed me that the ‘company A’ was a dubai free zone and they owned another company in dubai LLC, here called ‘company B’. so the visa stated that I was employed for the right position except that everything including visa, labour card and contract states that I am employed for ‘company B’. And said this is of no worry to me. I had finished all the signing of the contract and had completed my medicals And obtained a labour card. And officially signed the contract in July.

    So now, May 2015, it’s been unofficially more than two years of service to them.but officially My labour card has expired (Does this mean I have completed my service?) And my employment visa on my passport gets over in july 2015 .

    The new development is that they have started another company in dubai LLC with the same name as company A and plan to shift me from my current company B visa to company A. I asked the question whether it will be a new contract and they have indicated the same so.

    I have had a decent time at working with them but just I can not be tied down for another two years with them.

    Tell me as to how I should handle the situation,
    If I want to shift before the end of the year into another company entirely? and would you advice changing my visa from company A to company B. What about gratuity?. Should I not ask them for the same prior to changing.
    Also how does probation period come into play in an unlimited contract. Can I change jobs into another company during the probation say they put me on company A visa? Is a labour ban applicable?

    Since my labour card has expired after the two year period. Can I change jobs now and not expect a ban While serving the notice period.

    And in my case what can be done to avoid a ban if I want to change jobs either way?

    I am currently earning a basic of 3k. With overall at 5K. They have given me a raise after the completion of each year. And now my salary is 7k. With basic remaining the same.

    Thank you so much for your time.

    • Nick,
      You could resign right now and move on as your labour card has already expired.
      If you complete your contract, labour ban is not applicable.
      The company should take decision on increasing the basic and you should insist on increasing the basic as it is on basic salary, the gratuity is calculated.

  24. hy deepak..

    you alwyz been such a great help for me by answering our qstns..thank u so much
    im working in frezon compnay for last 3 and half mnths.bt now im getting engaged and i wana resign..ts an unlimited cntrct n also 3 mnths salry should be given to compny mentiond in cntrct
    now im goin for leave and im not sure whtr i can come back due to family pressure.i talked to them regarding this they are straight away asking for 10000 drhms,somehow they approvd d leave
    can u plz tel me if there wil b any consequences i have to face if im not coming back?im not taking my one month salary and i dont have any liabilities here
    plzzzz reply

    • Sruthi,
      Free zone companies need not follow labour law. Hence, if the clause to pay the company is mentioned in the Freezone provided contract, you will have reimburse the company.
      If you do not cancel, go on leave and do not come back, the company may impose absconding case against you and you may not be able to return to UAE.

  25. hi deepak, urgent plz.

    i am working in a private company with unlimited contract. I have completed exactly 12 months as of now. My company facing financial issues. They may terminate me shortly.

    If the terminate me, will I get ban? What if they are ready to give me NOC?

    thanks,
    SHA

  26. Dear Deepak,

    I trust your reply .

    Kindly note that I am on unlimited contract with Private company..
    2 years visa ..I still didnt complete my two years..1 year and 9 months.. I may get an offer from another company ..
    my contract with my current company (not labour contract ) internal contract between me and company says if both parties want to terminate the service a notice period with 60 days should be given at least.

    Now I have three questions please :

    1- can i leave before 60 days (one month only) and pay the other 30 days even if the company disagrees,
    2-can I give two months notice period and work two months and ask my current company to cancel my visa within 1 month so the other company can issue new visa for me to speed up the process because they need me within 1 monh?

    3-if I leave within one month and the new company issue free zone for me ,,can the current one put 1 year ban since the notice period has to be two months ?

    • Anas,
      1. Depends on company whether they accept.
      2. Not possible.
      3. Again, notice period depends on company. If you join free zone, labour ban is not applicable.

      • Thank you very much,,I have another question :

        I called MOL and asked if I give my company 1 month and pay 1 month while my company dont want ,they told me call MOL and then the case will be finalized and you pay to them 1 month and they put 1 year ban,,

        now my question what is the worst case scenario if I called MOL informing them my company dont want to accept ,I mean I if both parties are suborn ,,what is the result,,directly If i call MOL and tell them they dont want ,,can my company become stubborn also and reject cancellation of my visa which expires in next JULY?

  27. Dear Deepak,

    I am writing regarding to my delay in cancelling my visa (unlimited type)….which my company has not cancelled after a 60notice period. Company is making excuses since 7days….it s been 67days…have nit cancelled my visa….I completed my 2yrs on 5th Dec 2014…and new was stamped on 15th Dec 2014….On Jan 13th I gave my resignation….Now I want to know…if I approach labour on this issue…how fast will be the action from the labour side and how long it will take..for receiving settlement and cancellation to be done.

    • Raj,
      This is a violation of law on part of the company.
      You may approach MOL and file a complaint.

  28. Dear Mr. Deepak,

    Is it right that my employer confiscated my passport even though I did not signed yet the contract? Only employment visa and offer letter are the only documents I have.
    I have 3 months probation period and planning to leave in this company because of misbehavior and unprofessional words from my employer. Is it an acceptable reason to leave in this company? Is there any UAE labor law about the misbehavior of employer?
    Can I leave the company anytime during my probation period?
    Also, How long is the usual duration for employment visa? Because my employment visa is only for 2 months. I just get confused. I am new in Dubai.

    Please advise.
    Look forward to hear from you.
    Thank you so much and more power!

    • Youngiane,
      How is it possible to obtain labour approval without signing labour contract??
      Yes, if you are harassed, it is a valid reason. You will have to file complaint with MOL with evidence.
      Yes, you could leave company during probation. However, you may face labour ban.

  29. Sir I would like to ask if I resign under probation period and also I already render for a moth hoe much do I have to pay in my company?By the way I’m having Unlimited Contract and I am working in the hotel,because their asking me to pay 3000 aed they told me its for Visa, and training,etc.?

    Thanks
    Maria

  30. Hi Deepak sir,

    Once again thank you for your valuable reply, however I have another issue. My labour contract is unlimited,salary aed.3000+1000/- mentioned in the contract.But I am working as sales representative in one of the insurance company, salary getting as commission basis(average commission aed.5000/pm-) only since August 1999. Deepak ji, I want to know I will get all the dues and gratuity If I will resign from my company now.

    I will appreciate for your early reply.
    Thanks
    madhu sankar

    • Madhu,
      Gratuity is to calculated as per the basic salary mentioned on the labour contract or latest drawn basic salary.

  31. Hello Sir,

    Am I eligible to take my wife here in UAE on a husband visa with the below salary details? :

    Basic Salary: 1600

    Housing Allowance: 1200

    Transportation: 800

    Others: 1200

    *** Is it based on the basic salary or the monthly net? ***

    I need you reply asap sir…

    thank you and more power to you…

    • Fakher,
      You are eligible.
      But make sure you have all documents like Ejari, marriage certificate attested and translated etc.

  32. dear deepak,

    i have UNLIMITED CONTRACT. what will happen if i escape my employer and go back to our country without informing them and cancelling my visa.

  33. Dear Deepak,
    I NEED HELP! PLEASE HELP ME. I’ve been in this company in Al Reem for 1month and 11 days to be exact. On my 2nd and 3rd week, I’ve experienced sexual harassment from one of the department heads. I told the HR about this then what they did was talked to that person. After a week he stopped bothering me, then just this Tuesday he was verbally sexually harassing me. I am no longer comfortable working here. I am still in probationary period. I have unlimited contract. I want to resign. I am so scared. My salary is only 2250 for a document controller. What should I do?? What will happen if I resign?

    • Nikki,
      File a complaint immediately with Ministry of Labour.
      Call them: 800 665. But you should have some evidence.
      If you resign, you may face labour ban.

  34. Hi
    I have a question , one of my friends previous company has lodged a labor case against him for joining the competition. Court date is falling next month but he has to travel to some place on a business trip before that .

    My questions is – Since its not a criminal case and he is not a defaulter in UAE , will he still be able to travel and rerun and appear before the court

    or labor case comes with immigration and travel ban till the time case is closed

    Kindly advise

    Thanks

    • Dear sir.
      my visa was expired last 20 feb 2015. I’ve filed already for the cancellation . this coming 20 march 2015 will be his 30 days but until now my cancellation are not done. my visa is unlimited. Ive been works more than 5 years…my question is the so called 30 days grace period to stay after the cancellation is also applicable to those with already expired visa? the 30 days grace period will be only started counting once the visa are cancelled even it is expired?

      Kindly advise

      Thanks

      • Rudi,
        Once the visa is expired, you have to exit UAE. You will fall under watchlist if you continue to stay and there may be fines.

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