When an ex-pat sets up an LLC in the UAE there are rules that they need to adhere to in regards to employee probation periods.
It’s standard practise in the United Arab Emirates to employ staff for an initial probationary period before taking them on full time. There are legal requirements that businesses must follow when they hire an employee for an initial probationary period.
Probationary time period
Article 37 of Emirati law dictates that an employees’ initial probationary period can last no longer than six months, however it’s up to the parties involved to determine the length of probation within this limit. The initial probation period is not obligatory under UAE law. This means that a business can waive probation and commence employment if they wish.
The employee or the employee can terminate the contract at any point during probation with immediate effect without providing notice or a valid reason. When the initial probationary period has come to an end it’s considered a part of the prospective employees overall term of employment and must be taken into account when calculating their gratuity and other terminal benefits.
Wages during the initial probationary period
Under UAE law, an employer must pay the employee the wages they’ve amassed during their initial probationary period and any repatriation costs they’ve incurred if they’ve moved to the Emirates to take the position.
However the obligation to pay repatriation costs is voided if the employee resigns during the period of probation without a good cause. If the employment contract is terminated without notice during probation the employer isn’t obligated to pay end of service gratuity or compensation in lieu of notice or damages to the outgoing probationary member of staff.
Businesses in the UAE should implement an initial probationary period
Initial probationary periods are common practice in the UAE for good reason; they provide employers with a safety net to ensure they have hired the right person for the vacancy.
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