Do employment contracts survive a change of company ownership in the UAE?
Yes. Article 48 of Federal Decree-Law No. 33 of 2021 says employment contracts remain valid when an establishment's form or legal status changes. The new employer is responsible for carrying out those contracts and the law from the date the establishment's data is amended with the authorities.
On this page
What transfers
Service continues, so gratuity accrued under the old owner remains due on the full service. Leave balances, notice terms and any agreed benefits carry over with the contract.
Acquisitions in construction
When a contractor is bought, or converted from a sole establishment to an LLC, buyers should check the gratuity liability, leave balances and any unpaid wages, because those obligations come with the workforce.
How SupaJack Construct helps
Gratuity is accrued monthly and leave is held as a dated ledger, so a buyer can see the end-of-service and leave liability per employee at the transfer date.
Related tools and guides
See the UAE labour law guide for contractors, the final settlement calculator, the gratuity calculator, the annual leave calculator, the unpaid leave deduction calculator, payroll and WPS in SupaJack Construct, time and attendance and the meaning of basic salary.
Worked example
A contractor with 90 workers converts from a sole establishment to an LLC. The workers' contracts continue with the LLC. A mason with 8 years' service keeps his 8 years for gratuity, and his unused leave carries over.
Questions people ask
Does service restart with the new owner?
No. Contracts and service continue.
Who is responsible after the change?
The new employer, from the date the data is amended.
Do leave balances carry over?
Yes, with the contract.