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Process of Employment contract termination in UAE

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Introduction

According to UAE labor law, an employer can terminate the employment contract of the employee. Or termination of employment contract in UAE can be done singly by both employee and employer in case of unlimited contract. But as per the UAE contract termination law in case of the limited agreement, it can only be done with the knowledge of both parties. Or if one of them decides to leave or agrees to terminate the employment contract. In special cases, an employment contract can be terminated without providing a notice period. It is known as forced termination in UAE. Employers too can terminate the contract without notice for unjustified reasons.

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Termination of employment contract UAE without employer notice

The owner or hirer has the right to dismiss an employee's job contract according to article 120. It can be done based on the following reasons when the employee:

  • Violates mandatory safety instructions and rules of the place. Besides safety instructions have been informed and provided in writing to the employee. Or to the illiterate employee, the safety instructions were given orally.
  • Makes an error or mistake in the work. And if ultimately causes significant financial loss or company loss in any manner. The owner or hirer has to inform MOI or the labor department within two days (or 48 hours).
  • Submit fake educational certificates, professional experience, passports, or give wrong personal information.
  • Fail or not able to perform basic work responsibilities. At least employees should know the work responsibilities mentioned in the labor contract nicely. If the behavior of the employee towards work is not serious.
  • If the labor contract is terminated while the end or during the probation period. 
  • Divulge or pass out company or work trade information and private information where the employee is working currently.
  • Absent from work for one week continuously (7 days) or 20 days in a year.
  • Caught heavily drunk or if found using banned drugs during working hours.
  • Physical harassment or assault of other workers, employees, officers, managers, etc.
  • Sentenced or found guilty by a court of law for serious criminal or social offense.

Labor contract termination in UAE without any notice by the employee

An employee can terminate the labor or employment contract if:

  • The employer has breached the employee's legal rights. Or if the employer has not been able to fulfill the terms outlined in the employment contract. Like termination of the labor contract in UAE can be done if the employee does not pay the salary continuously for two months.
  • If the employer failed to secure or protect the employee's work or job. Employees can file complaints in such cases.
  • If the employee wins the case against the employer. The labor complaint was made by the employee to the MOHRE.

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Termination of the limited labor contract in UAE

UAE limited employment contract is a fixed term employment contract and it must not exceed two years duration. The validity of the limited contract is directly connected to the residency visa validity. The notice period before terminating a limited labor contract must be between one to three months. Both parties have the freedom to terminate the contract if all the legal termination rules are followed. The employment contract requirement must be fulfilled during the notice period. Compensating the next party up to the agreed fixed amount in the contract for early termination. The reason can be:

  • The fixed-term period of the contract is over. And no renewable has been done.
  • Both employee and employer have decided together to terminate the contract.
  • Employee violating article 120 law intentionally.

Termination of the unlimited labor contract in the UAE

The UAE labor contract termination law state that the agreement can be ended if:

  • Both the parties have no problem and want to cancel the work agreement or contract.
  • If the employee or employer wants to terminate the job contract by giving prior notice. It should be done at least one month before and must not exceed three months.
  • If the terminating party does not follow legal requirements like sending the advance notice, or without a valid reason. Then they have to face legal action or consequences.

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Conclusion

Termination of UAE labor contract in UAE should be done by giving notice between one to three months. So, the terminating party does not have to face legal consequences. If your employer has terminated your employment contract, then you will get 30 days grace period to obtain a new residence visa.

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Frequently Asked Questions

The employer terminates or ends the employment contract of the worker without any valid or justified reasons. Or if the employer forces the worker to resign. Then it is referred to as the arbitrary dismissal. Ex- if the worker has to resign for reasons not related to work.

The unlimited employment contract means it has no fixed time and is an open-ended contract.

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