Everything you should know about an international employment contract
When it comes to writing an International employment contract you need to take several aspects into account. If you’re planning your expansion and you need to manage a global workforce you must offer compliant contracts. Whether you’re sending employees to the target country or you’re hiring abroad, your contracts must meet local employment regulations.
In this article, you’re going to learn everything you need to know about how to write a contract for your international labor. In addition, you’re going to gain understanding on several aspects that businesses oftentimes overlook so you don’t encounter any hidden matter.
- Everything you should know about an international employment contract
- What is an international employment contract?
- What form should the contract take?
- Why do you need to write a compliant employment contract?
- What is contained in the UAE contract?
- What are the types of employment contract in the UAE?
- Which essential aspects should you take into account when writing the contract?
- Why is Connect Resources your best option for your international expansion?
1. Everything you should know about an international employment contract
When you’re expanding to a new market you have to plan several aspects. One of the most important matters you have to deal with is the HR details. In your home country you may be familiar with employment regulations, but you have to know the rules that must be follow in your target country.
Since you’re going to hire people to work for you in this new office you must know the regulations associated with global hiring. This is because you must write a contract for your employees and you have to make it in compliance with local laws.
Therefore, if you’re looking for an International employment contract sample you just need to understand its essential parts and then you can write one on your own.
1.1 Why do you need to know how to write a contract?
Perhaps you think that you don’t need to know about contracts but if you’re planning to open a branch in the UAE it’s essential to have this knowledge.
Some of the reasons why you should know everything about international contracts in the UAE are the following:
- It helps you have an overview of the aspects you should include
- You can gain a better understanding about the UAE Labor Law and offer a better employment package
- It’s helpful because it allows you to be prepared when you send your employees to this country
- You can decide if you want to do it yourself or if you prefer to have legal experts to help you
Even if you have an International employment law guide you have to be very careful when you write your contract. There are high stakes if you get it wrong, therefore, you should do it correctly.
2. What is an international employment contract?
Before starting to know the considerations for your International employment contract you must know what it is. As you may know, a contract is a legal document that establishes the work relationship between the employer and an employee. Hence, an international contract is the same but it’s between you and your employees in overseas locations.
A contract is considered a legal statement of record, and it contains essential information regarding the job. Therefore, it contains key details regarding the employment relationship.
Some of the essential aspects of an employment contract are the following:
- It outlines the main responsibilities of the employer
- It should address the employee’s responsibilities
- The contract should contain all the details regarding employment basics (benefits, overtime, working hours, etc.)
As you can see, there’s not a big difference between your domestic contract and the international one. However, when it comes to the UAE you must know that there are some aspects you must consider.
2.1 What is the employment contract in the UAE?
If you’re planning on sending expatriate employees to your new branch in the UAE, you must have knowledge about contracts.
An important aspect that business owners have to take into account is that they have to offer a UAE Employment Contract. Although the employee has signed a foreign contract, they need to sign an Arabic/English one in compliance with UAE Labor Law.
This is because employment in the UAE should follow the rules established by the authorities and in accordance with Federal Law No.8 of 1980. All the employees working in the UAE are subjected to the Labor Law even if the contract was executed abroad. It means that if you have a branch in this country, you must execute a UAE employment contract.
Why is it essential? It’s because without this document the employee can’t get the work permit. Thus, he/she won’t be able to work legally. For this reason, you should look for assistance if you want to have employees working in the UAE.
3. What form should the contract take?
When it comes to the International employment contract, you may be wondering what form it should take. Some of the aspects you should take into consideration are the following:
- Writing form: the UAE employment contract should be in writing. Although in some countries the verbal agreements are enforceable, in the UAE the employment relationship doesn’t take this form.
- Language: in the UAE, the employment contract should be in Arabic and English. This is highly important because in case of a dispute, the Arabic text prevails.
In most cases, employers offer the contract to the employee in their home country. In this case, this would be the Foreign Law Contract. However, since in the UAE you should also offer a UAE employment contract, there would be two documents. Hence, there are two different forms of contract when it comes to expat workers.
4. Why do you need to write a compliant employment contract?
When you’re writing your International employment contract you need to keep compliance in mind. Perhaps you’re wondering why you have to worry about this. First of all this is how law works.
Some of the reasons why you should write a compliant contract are the following:
- Employee protection: when a dispute arises, the employee protection is a big issue in the UAE. For this reason, you have to write your contracts respecting this matter.
- Protection for your business: when you offer compliant contracts you make sure that your business is protected in case of a dispute. If a dispute happens with any employee, then everything will be handled according to the contract, which is the legal document.
- Payroll: when you write your contract you have to specify several details that will be followed by your payroll team. For this reason, the document should follow the local laws so your payroll team can proceed accordingly with payments, taxes, and more.
5. What is contained in the UAE contract?
The employment contract for your employees in the UAE should contain several essential aspects. It’s a short contract but it contains the basic employment terms.
If you’re looking for an International employment contract sample, you should consider the following aspects:
- Start date
- Length of employment
- Employee’s salary and benefits
- Working hours
- Vacation policy
- Overtime policy
- Termination policy
- Term of the contract
As you can see, there are several employment aspects you have to take into consideration. Keep in mind that all of these aspects have to be in compliance with the UAE Labor Law. For this reason, it’s important to have a vast knowledge about local regulations.
6. What are the types of employment contract in the UAE?
For the private sector there are three types of International employment contract. If you don’t know which one could be the best for your business, then you have to continue reading.
6.1 Limited term contracts (fixed-term)
This type of contract is perfect for employers that look for workers for a specific project. It has the following characteristics:
- Start date of employment period
- End date of employment period
- If the contract isn’t renewed the it’s cancelled when it expires
- It has a maximum duration (2 years)
- It should include a notice for termination
Keep in mind that regulations regarding fixed-term contract may change, so make sure to stay up-to-date to ensure compliance.
6.2 Unlimited term contract
It’s the most commonly used in the UAE and it has the following characteristics:
- Open-ended contract
- It can be terminated with mutual consent
- If the employee wants to terminate it, he/she should give a notice of 1-3 months
- Throughout the notice period the parties should honor their obligations
6.3 Part time contract
Some companies can hire workers and offer them the multi-employer contract or part-time contract. It characteristics are the following:
- It’s only available for skilled workers
- It has to remain with its form which means that can’t change to a regular contract
- The worker can’t work for more hours than those set in the contract
A skilled worker with a part-time contract can take several part-time jobs.
7. Which essential aspects should you take into account when writing the contract?
Once you know everything that’s involved in the contract, you have to take a close look to several aspects that can be detrimental for your business if you overlook them.
Perhaps in your home country you don’t have to worry about it, but internationally you should. These essential aspects are the following:
- Terminations: since there are several levels of employment protection, termination can be difficult. Make sure to follow local regulations and include notice requirements and other important details. If you don’t get this part right, you’re at risk of receiving a lawsuit.
- Fixed-term contracts: If a fixed-term contract is useful for your business you still have to consider local laws before opting for it. Make sure to be aware of the maximum duration and the aspects you have to include.
- Labor Law: take a closer look to the UAE Labor Law to make sure you offer your employees all the benefits according to the regulations.
7.1 How can you avoid risks?
Expanding your business and opening a branch or an office could be difficult. If you don’t have a strong HR team that ensures compliant contracts, then your business may be at risk.
For this reason, you can contact a global Employer of Record (EOR) like Connect Resources to ensure everything is correct. With this comprehensive solution you have a legal and HR team at your disposal. Hence, you won’t have to worry about all of these aspects and the specialists can write compliant contracts.
With the help of a third-party you can have an International employment law guide that’s going to be useful.
8. Why is Connect Resources your best option for your international expansion?
If you’re looking for the best partner to help you with your international expansion you can count with Connect Resources. We have been assisting several companies in a variety of industries to enter in new markets.
Our team of HR experts can help you write the best contracts for your global workforce in compliance with local laws. We can help you with each step of your expansion so you can meet your goals. Hence, we are your best partner if you want to take your business to new places.
Would you like to contact Connect Resources for EOR services? You can call at +971 433 166 88 or send an email to [email protected], and you’ll talk to one of their representatives that will gladly answer all of your questions.