UAE Jobs: Employee Termination Law

What is Termination of Employment in UAE?

According to Article 43, any party to an employment contract may end it for any “legitimate reason,” as long as they provide the other party written notice and give them a notice period of either one month (30 days) or three months (90 days).

Under certain circumstances an employer or company need to end an employee´s contract. However, for them to go forward with termination of employment in UAE, they need to follow certain rules. If they don´t follow these rules, the company suffers from the legal consequences if the ex-employee pursuits them. 

In this article, you will see everything you need to know about rules of termination of employment in UAE. After all, if the employer does not follow them correctly, not only the might face consequences but its reputation will also drop. We will cover:

1. Do you know when can an employer terminate a contract?

According to employee termination UAE law, an employer might issue a termination letter for employee under certain situations. For instance:

1. If an employer does not extend an expired contract.
2. If both the employer and the employee agree on the termination of employment in UAE
3. In the tragic event of the employer´s or employee´s death. However, this only applies if the entity relates to the contract´s subject.
4. If either one of them wants to end the contract. Nevertheless, the part that wishes to end it needs to observe the provisions of the termination letter for employees and the notice period in UAE.
5. In the event that an employee is completely disabled and has a permanent inability to work. Nonetheless, the employee needs a certificate issued by a medical entity to prove it.
6. When a worker receives a freedom-restricting penalty of 3 or fewer months by a court judgment.
7. If the company the employee and employer work for is closed down permanently.
8. If the employer goes bankrupt or faces any reasons (for instance, economic) that prevent them from continuing with the project.
9. Lastly, if the employee cannot renew the work permit and the reasons for it are beyond the employer´s control.

Moreover, if either the employer of the employee wants to go forward with the termination of employment in UAE, they need to:

1. Give a written notification to the other party about the decision.
2. Serve a notice period in UAE of 1 to 3 months (30 to 90 days).

2. When can an employer or employee terminate a contract without notice?

When an employer or employee terminates a contract, there are some employee rules of termination of employment in UAE. These are:

• The employee must work as they agreed on the contract during the notice period in UAE. Furthermore, they are entitled to receive the full wage as per the contract.
• If any party fails to serve the notice period they will have to pay a “notice period” allowance. This allowance is equal to the worker´s wage for the period in proportion to the time remaining in the period.
• Lastly, if the employer goes forward with the termination of employment in UAE, the employee receives unpaid leave. This unpaid leave corresponds to one day per week during the notice period in UAE.

Nevertheless, under the rules of termination of employment in UAE, the employer or worker can terminate the contract without a notice period under certain situations.

2.1 By the employer

An employer can hand a termination letter to employee without a period notice if the employee:

• Submits forged documentation or has a false identity.
• Causes substantial material loss to the company because of an error.
• Deliberately damages the employer´s properties.
• Does not perform basic duties under their contract and constantly violates them despite receiving warning on 2 occasions.
• Gets found drunk or under the influence while working
• Commits an action that breaches the public morals of the workplace
• Violates instructions concerning workers safety.
• Assaults any of their colleagues, managers or their employer during the course of work.
• Is absent for more than 20 days or 7 successive days without a lawful excuse.
• Illegally exploits their position for personal reasons.
• Joins another establishment without following the rules of termination of employment UAE.

2.2 By the employee

An employee might follow through their termination of employment in UAE without a contract period if the employer:

• Does not meet their obligations (both legally and contractually).
• Assaults or harass them at the workplace.
• Instructs the worker to perform tasks different from the work the employee agreed to in the employment contract.
• Does not remove any factors that can threaten the safety of the employee despite being aware of it.

3. How can Kinza HR help you terminate a contract properly?

Even with this information, employee termination UAE law can prove hard to handle for certain employers. For instance, even with these examples there are exceptions to the rules that must be known of or followed. That is why we recommend that you hire a company that helps you with termination of employment in UAE.

KinzaHr is one of the leading recruitment consultant Dubai who can help you with anything related to employee termination rules in UAE. You can call us at +971 43 316 688 or email us at contact@kinzahr.com. That way you will quickly get in touch with our advisors.