Process of Termination of Employment Contract in UAE

Author- Ridhi
Publish Date- 27-12-2023

According to UAE labour law, an employer can terminate the employee's employment contract. Or Termination of Employment Contract in UAE can be done singly by both employee and employer in case of an unlimited contract. But as per the UAE contract termination law in the case of the limited agreement, it can only be done with the knowledge of both parties. Or if one of them leaves or agrees to terminate the employment contract. In exceptional 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.

Termination of Employment Contract in 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 it ultimately causes significant financial loss or company loss in any manner. The owner or hirer has to inform MOI or the labour department within two days (or 48 hours).
Submit fake educational certificates, professional experience, and passports, or give wrong personal information.
Fail or not able to perform essential work responsibilities. At least employees should know the work responsibilities mentioned in the labour contract nicely if the employee's behaviour towards work is not severe.
If the labour contract is terminated during the end of the probation period.
Divulge or pass out company or work trade information and private information where the employee works.
Absent from work for one week continuously (7 days) or 20 days a year.
Caught heavily drunk or 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 severe criminal or social offence.

Labour contract termination in UAE without any notice by the employee

An employee can terminate the labour or employment contract if:

The employer has breached the employee's legal rights. Or if the employer has not been able to fulfil the terms outlined in the employment contract. Termination of the labour contract in UAE can be done if the employee does not pay the salary continuously for two months.
Suppose the employer fails to secure or protect the employee's work or job. Employees can file complaints in such cases.
Suppose the employee wins the case against the employer. The employee made the labour complaint to the MOHRE.

Termination of the limited labour contract in UAE

UAE limited employment contract is fixed-term and must not exceed two years. The validity of the limited contract is directly connected to the residency visa validity. Before terminating a limited labour contract, the notice period must be between one to three months. Both parties can 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 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 Unlimited Employment Contract in the UAE

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

Both parties have no problem and want to cancel the work agreement or contract.
Suppose 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.
Suppose 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.

Conclusion

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

Apply for UAE Visa