Learn about the legal processes for employee termination and severance in United Arab Emirates
The UAE Labour Law outlines the legal requirements for notice periods during employment termination. These requirements differ slightly based on the type of employment contract.
For unlimited contracts, which have no set end date, the notice period is generally 30 days. This means either the employer or the employee must provide written notification of termination at least 30 days before the last working day. However, the contract itself can specify a longer notice period of up to 90 days, provided both parties agree to it.
There is a special provision for daily-paid employees on unlimited contracts:
For limited contracts, with a pre-determined end date, there is no statutory minimum notice period. However, if either party wishes to terminate the contract early, they must typically provide at least 30 days' notice. The employment contract can specify a longer notice period of up to 3 months, but not exceeding the contract's end date.
In both unlimited and limited contracts, employers can offer compensation to the employee in lieu of them serving the notice period. This should be mutually agreed upon and documented.
In the UAE, employees are entitled to an End-of-Service Gratuity, also known as severance pay, upon termination of their employment contract under certain conditions. The amount is determined by several factors outlined in the UAE Labour Law (Federal Law No. 33 of 2021).
Employees are eligible for severance pay if they meet the following criteria:
UAE severance pay is calculated based on the employee's basic salary and their length of service:
There are cases where an employee's severance pay may be reduced:
If the employee resigns without a legal cause, their severance pay is reduced based on length of service:
An employee dismissed with a valid reason by the employer may forfeit all or part of their severance pay, depending on the dismissal reason.
The lawful termination of an employee in the UAE involves specific steps aligned with the UAE Labour Law (Federal Law No. 33 of 2021).
Employers can only terminate an employee's contract for valid reasons. These include:
Both employers and employees must provide written notice of termination, adhering to the following legal regulations:
An employer can terminate an employee without notice only in extreme circumstances as outlined in Article 120. These typically include:
If either party believes the termination is unjustified, they can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE). The MOHRE offers mediation and dispute resolution services. Cases unresolved at the MOHRE level can be referred to the courts.
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