Limited, unlimited, and what actually happened to your contract

What was abolished, and what replaced it

Federal Law No. 8 of 1980 ran the UAE private sector for forty-one years and split contracts in two. A limited contract had an end date; leaving it early exposed you to compensation of up to three months' pay. An unlimited contract had none; you could resign with notice, but resigning before five years cut your end-of-service gratuity to one-third or two-thirds of the calculated amount.

Article 73(1) of Federal Decree-Law No. 33 of 2021 abrogates Federal Law No. 8 of 1980 outright, with effect from 2 February 2022 (Article 74). Article 8(3) then leaves one contract type standing: "Contract of employment shall be concluded for a specified period of time, subject to renewal, in accordance with the agreement of both parties."

The three-year cap is gone too, and it went early. As originally enacted, Article 8(3) required a fixed term "not exceeding three years". Federal Decree-Law No. 14 of 2022 amended that clause and removed the maximum, effective 29 September 2022 — this is the single amendment marked in MOHRE's consolidated text of Article 8. A fixed-term contract today can run for any length the parties agree. If a summary tells you UAE contracts are capped at three years, it is four years out of date; and if your own contract still carries a three-year term, that is a contractual choice, not a statutory ceiling.

Article 68: the transition provision nobody reads to the end

The whole transition lives in one short article, "Adjustment of Situations". It has three clauses and each does something different:

Art. 68(1)	The provisions of the new Decree-Law apply to unlimited-term contracts concluded under Federal Law 8/1980.
Art. 68(2)	Employers shall adjust their situations and convert unlimited-term contracts to fixed-term contracts within one year from the date of enforcement. The Minister may extend this period as required by the public interest.
Art. 68(3)	Subject to Clause (2), the employer may calculate the end-of-service benefits in accordance with the provisions of the unlimited-term contract stated in Federal Law 8/1980.

Clause (1) is the important one and it is easy to skim past. From 2 February 2022 the new law governed unlimited contracts immediately, whether or not anyone had signed new paper. Conversion was an administrative tidying-up of documents that were already being governed by the new rules. Nothing about your rights waited for a signature.

Clause (2)'s one-year window ran to 1 February 2023. The Minister then used the extension power: Ministerial Resolution No. 27 of 2023 pushed the deadline to 31 December 2023, announced by MOHRE on 30 January 2023. That deadline has not been extended again. MOHRE's announcement set no penalty figure of its own, so any specific fine you see quoted for a missed conversion is somebody's inference; non-compliance sits under the Decree-Law's general administrative penalties regime rather than a published per-contract tariff.

One divergence worth knowing about. The government portal's page on contract duration, updated 12 August 2026, still describes the obligation as converting unlimited contracts "within one year of the effective date of the existing contract". Article 68(2) measures that year from the enforcement of the Decree-Law, not from each individual contract's start date — and the operative deadline has been 31 December 2023 for over two and a half years. The portal text is stale in both respects. Work from Article 68(2) and Resolution 27/2023.

Your service term did not restart. Two articles say so.

This is the single most expensive misunderstanding of the transition, and it was told to a lot of people in 2022 and 2023: sign the new fixed-term contract, and your gratuity clock starts again from zero.

It does not, and the law is not ambiguous about it.

• Article 8(4): "In case of extending or renewing the contract, the new term(s) shall be considered an extension of the original term and shall be added to it while calculating the worker's continuous term of service."
• Article 8(5): if both parties simply keep performing after a term expires without express agreement, the original contract is implicitly extended on the same conditions. Continuity is the statutory default, not something you have to negotiate for.

Put Article 68(1) next to Article 8(4) and the answer follows: the new law applied to your old unlimited contract, the converted contract is a continuation of it, and your continuous service runs from the date you actually started work. A 2014 joiner who signed converted paper in 2023 and leaves in 2026 has twelve years of service for gratuity purposes, not three.

And if you were pressed to sign something saying otherwise, Article 65(3) is the backstop: every provision contradicting the Decree-Law is null and void "even if it was existing prior to its enforcement", and "each discharge, reconciliation or waiver of the rights arising for the worker hereunder shall be null and void if it violates its provisions" — unless it is more beneficial to the worker. A clause resetting accrued service is exactly what that sentence is aimed at.

The one case that is genuinely different is where your pre-2022 gratuity was actually calculated and paid out at the point of conversion. Money received is money received; that period has been settled and the clock for the unpaid remainder runs from then. A piece of paper saying service restarts, with nothing paid against it, settles nothing. Run both readings through the gratuity calculator before you accept a figure — on a mid-range package the difference between three years and twelve is six figures.

The conversion could not be used to cut your terms

A conversion is a moment when a contract is reopened, and a certain number of employers used it to re-paper salaries, allowances and notice periods downward. Article 65(5) forecloses that:

"The employer may not review the terms and conditions of the employment contract in force with the worker before the issuance of this Decree-Law, in order to apply the provisions hereof, unless those amendments are intended to achieve a greater advantage and benefit for the worker."

Read it carefully: the prohibition is specifically on reviewing pre-existing terms in order to apply the new law — which is precisely what a conversion is. Amendments in that exercise are permitted in one direction only. A conversion that moved money from basic salary into allowances, shortened notice, or trimmed leave is on the wrong side of Article 65(5), and Article 65(3) makes the offending provision void rather than merely challengeable.

The basic-versus-allowances shuffle is the one to check first, because it does not change what lands in your account each month and quietly reduces three separate entitlements at once — gratuity, untaken-leave pay and overtime. If your split changed at conversion, what basic salary really decides sets out the arithmetic.

Article 65(5) closes with the counterpart: "The employment contract can be updated after its expiry as per the provisions hereof." A genuine renegotiation at the end of a term is a different thing from a conversion, and is not caught.

Article 68(3): the old-law gratuity clause that is still in the statute

Now the awkward one. Article 68(3) permits an employer to calculate end-of-service benefits under the old Federal Law 8/1980 rules for unlimited contracts. Under that regime, resigning cost you: one-third of the gratuity between one and three years of service, two-thirds between three and five, the full amount only after five.

Everyone — this site included — describes that ladder as abolished, and for employment governed by the new law that is correct. But the clause permitting it was not deleted; it sits in the consolidated text MOHRE publishes today, and it is occasionally raised by employers against long-serving staff whose pre-2022 service was on an unlimited contract.

Our reading, offered as a reading. Article 68(3) cannot be used to pay a worker less than the new law provides. Article 65(1) states that "the rights stipulated herein shall represent the minimum rights for workers" and that nothing in the Decree-Law prejudices better rights under any other legislation, agreement or contract. Article 65(3) voids contradicting provisions except where more beneficial to the worker. Article 68(3) is best read as a permission to apply the old calculation where it lands higher — a floor, not a discount. An employer invoking it to knock a resignation down to one-third is asking the transitional clause to override the article that defines the statutory minimum, which is the wrong way round. We flag this as a reading of the interaction rather than settled text, because the clause is real and no reported decision resolves it. If it is put to you, the two sentences to quote back are Article 65(1) and Article 65(3).

Note also the drafting: Article 68(3) is expressly "subject to the provision of Clause (2)" — subject, that is, to the employer's own obligation to have converted the contract. An employer that ignored a deadline which passed on 31 December 2023 is not in a strong position to rely on the clause that is conditioned on it.

If your contract was never converted, Article 65(6) is yours

Conversion was not universal. Small employers, family businesses and companies that simply never got round to it left unlimited contracts running past the deadline, and Article 68(1) means those workers have been under the new law the whole time regardless. For them the Decree-Law kept one piece of the old architecture — and it is more generous than the standard rule.

Article 43(1), the general rule, sets notice at whatever the contract says, within a band of not less than 30 and not more than 90 days. In practice most contracts say 30, and 30 is what you get.

Article 65(6) overrides that for undefined-term contracts concluded before the Decree-Law came into force. Either party may terminate for a legitimate reason after written notice of:

Service term under 5 years	not less than 30 days
Service term over 5 years	not less than 60 days
Service term over 10 years	not less than 90 days

The ladder is driven by length of service, not by what the contract says, and each rung is a floor. A worker with fourteen years on an unconverted unlimited contract has a statutory 90-day notice entitlement even if the paper reads 30 days — and under Article 43(3), a party who does not observe the notice period owes compensation equal to the wage for the full period or the unserved remainder of it, "even if the absence of notification does not cause damage to the other party". On a 20,000 package, the difference between 30 days and 90 is AED 40,000 of notice pay.

Article 65(6) is written in the present tense and has no sunset. It is not a historical footnote; it is live law for every pre-February-2022 unlimited contract still running today.

What genuinely disappeared

For completeness, since these are the rules still quoted by HR departments and forum threads:

• Early-termination compensation on limited contracts — the old law's exposure of up to three months' pay for leaving a fixed-term contract before its end date died with Federal Law 8/1980. Ending a contract today runs on Article 43 notice and, where the termination is unlawful, the compensation capped at three months' wage under Article 47.
• The one-third and two-thirds resignation ladder — abolished for employment governed by the new law, subject to the Article 68(3) argument above. See resignation vs termination for what still differs between the two routes.
• The labour ban as an automatic consequence of leaving early — replaced by the work-permit rules and the narrow one-year bar that attaches to specific breaches, not to resignation as such.
• The contract type as a variable in your gratuity — the Article 51 formula does not ask what kind of contract you were on. Twenty-one days' basic wage per year for the first five years, thirty days per year after that, capped at two years' wage.

How to check what you are actually on, officially

Do not rely on the copy in your HR folder. The version that matters is the one registered with the Ministry.

1. Open MOHRE's View Approved Contract service at mohre.gov.ae, or the enquiry portal at inquiry.mohre.gov.ae. Both are free and available in the MOHRE app. You will need your work-permit or labour-card number.
2. Read three fields: the contract type and term, the date of commencement of work, and the basic wage against the total. The commencement date is the one to photograph — it is what your service term is built on, and it is the field a "restart" story has to contradict.
3. Compare it with the paper you signed. A registered contract that differs from your signed copy is worth raising immediately rather than at the exit interview; Article 7(2) lets you prove the contract and the wage "by all possible means of proof", so keep offer letters, payslips and the WPS record.
4. If the registered contract still says unlimited, nothing is wrong with you and nothing about your rights is suspended — Article 68(1) put you under the new law in 2022, and Article 65(6) gives you the service-length notice ladder on top. The unconverted document is your employer's compliance problem, not a gap in your protection.
5. If something is off, the free MOHRE complaint is the route: call centre 80060 or "Add Complaint" in the app. The process, the AED 50,000 threshold and the deadline that ends late claims are set out in when the final payment doesn't arrive.

One boundary worth stating: none of this applies inside DIFC or ADGM, which run their own employment regimes and never had the limited/unlimited split in this form. If your employer is in either free zone, see DIFC and the DEWS scheme instead.