Termination of Employment Contracts in the UAE and Its Cases Both the employee and the employer inquire about the possibility of terminating an employment contract in the UAE and how this termination is carried out.
To find out, you should follow this article. If you need legal consultation regarding the termination of an employment contract in the UAE, you should contact Samaha Law Firm in the UAE.
There are two types of employment contract termination cases in the UAE:
- Termination of the Fixed-Term Employment Contract in the UAE.
- Termination of the Unlimited-Term Employment Contract in the UAE.
Cases for Terminating a Fixed-Term Employment Contract in the UAE
Both the employee and the employer can terminate a fixed-term employment contract in the UAE in three cases, as follows:
Case One: Non-Renewal of the Fixed-Term Employment Contract.
A fixed-term employment contract ends immediately upon the expiration of the period stipulated in its texts and provisions. Often, a clause is included in the employment contract stating that the party wishing to terminate the contract at the end of its term must notify the other party in writing.
If both parties wish to renew, the contract can be renewed for a similar, longer, or shorter period with the same terms and conditions, noting that the continuation of both parties under the contract after its expiration is considered an implicit renewal thereof.
Case Two: Termination of the Fixed-Term Employment Contract in the UAE During the Probation Period.
The UAE Labour Law provides for a probation period for the employee, during which either party—the employee or the employer—may terminate the fixed-term employment contract without the need for prior notice, payment of compensation, or bearing any legal responsibility. It is stipulated that the probation period must not exceed six months, and the employer is not permitted to re-contract with the same employee for a new probation period after the first one ends.
Case Three: Termination of the Fixed-Term Employment Contract in the UAE Before the End of its Term.
In this case, the party wishing to terminate the contract must deliver a written warning notice to the other party, informing them of their desire to terminate the employment contract in the UAE before its stipulated duration ends. This is conditional on the notice period being not less than 30 days and not more than 90 days.
Termination of an Unlimited-Term Employment Contract in the UAE
In the case of concluding contracts that have no specific duration, this does not in any way mean that the contract must continue without either party being able to terminate it, in addition to the multiplicity of reasons and changing circumstances that drive one of the parties to withdraw and cancel the concluded contract.
Hence, an unlimited-term employment contract in the UAE can be terminated based on the text of Article 42 of the Labour Law, through the following cases:
- Agreement between both the employer and the employee to terminate it, provided that this is documented in writing, and includes the settlement of financial dues and the granting of a certificate of experience.
- If one of the parties wishes to terminate the contract, provided that the provisions for contract cancellation and the necessary notice period are adhered to.
- The death of the employer if the content of the contract is linked to their person.
- The death of the employee or their total and permanent inability to perform the work, conditional on submitting a certified medical certificate proving this.
- If a final judicial judgment is issued against the employee that includes a prison sentence of not less than three months.
- The final closure of the establishment or facility owned by the employer.
- The inability of the establishment to continue operating due to the employer’s bankruptcy, insolvency, or exposure to economic problems.
Conditions for Terminating an Employment Contract in the UAE by the Employer
If the employer wishes to terminate an unlimited-term employment contract in the UAE, they must adhere to many rules defined by the Labour Law, which are:
- Notifying the employee of their desire to terminate the contract in writing.
- Allowing the employee to continue working and to receive their full salary throughout the agreed-upon notice period, which should not be less than one month and not exceed three months.
- In the event of not allowing the employee to work during the notice period, the employer must provide the employee with monetary compensation called “notice allowance,” which must be equal to the employee’s wage for the entire notice period or the remaining part thereof, even if the lack of notice did not cause harm to the employee.
- Granting the employee one day of leave each week throughout the notice period for the purpose of searching for other work. The employee can determine this day according to their preference, provided they notify the employer at least three days prior to the date.
- Granting the employee all their financial entitlements, including end-of-service gratuity, delayed wages, and unused leave balance.
Conditions for Terminating an Employment Contract in the UAE by the Employee
The employee can terminate an unlimited-term employment contract in the UAE, provided they adhere to the rules stipulated in Article 43 of the Labour Law, which are:
- Informing the employer of their desire to terminate the contract in writing.
- The employee continuing to perform the work tasks assigned to them throughout the agreed-upon notice period, which should not be less than one month and not exceed three months.
- In the event the employee fails to work during the notice period, they must provide monetary compensation to the employer called “notice allowance,” which must be equal to the employee’s wage for the entire notice period or the remaining part thereof, even if the lack of notice did not cause harm to the employer.
Termination of the Employment Contract in the UAE Without Notice by the Employer
As explained earlier, the termination of an unlimited-term employment contract in the UAE primarily relies on one party notifying the other. However, the law has specified certain cases in which the employee may be dismissed and the contract terminated without prior notice. These cases are exhaustively listed in Article (44) of the Labour Law and include the following:
- The employee submitting forged certificates.
- Impersonating another person.
- Intentionally damaging the employer’s property.
- The employee violating public safety instructions.
- Failure to adhere to their duties and obligations specified in the contract.
- Divulging secrets related to the establishment’s work in a way that harms the employer.
- The employee being under the influence of an alcoholic beverage or narcotic during work.
- Assaulting the employer.
- The employee being absent from work without a legitimate excuse for more than twenty intermittent days in a year, or for seven consecutive days.
- The employee illegally exploiting their job position.
Termination of the Employment Contract in the UAE Without Notice by the Employee
The employee can leave the job and terminate the unlimited-term employment contract in the UAE without notice to the employer if one of the following cases, approved by Article 45 of the Labour Law, is realized:
- The employer breaching their obligations under the contract, provided the employee submits a report to the Ministry 14 days before the date of leaving work and the employer fails to adhere to their duties despite being notified by the Ministry.
- The employer or their representative assaulting the employee, or the employee being subjected to violence or harassment.
- The workplace containing a defect that poses a risk to the employee’s safety or health, provided the employer is aware of it and fails to take the necessary measures.
- The employer assigning the employee tasks that violate the duties specified in the contract.
We have explained everything related to the termination of the employment contract in the UAE for you. If you need legal consultation regarding the termination of the employment contract in the UAE, you should contact Samaha Law Firm in the UAE, as Samaha Law Firm is specialized in the termination of the employment contract in the UAE… Samaha Law Firm is always your best choice. Contact Us.
