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Cancellation of employment contract UAE Dubai

cancellation of employment contract

In the UAE, the cancellation of employment contract is regulated by the Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations in the Private Sector – the UAE Labour Law.

This article will provide an overview of the provisions related to cancelling employment agreements in the UAE.

Office of Al Mulla. Whatsapp: Click here. Location: Dubai. Phone: 00971501961291.

Cancellation of employment contract.

What does Termination of Employment entail? It refers to the conclusion of the working association between an employer and an employee.

The conclusion of employment can occur through the initiative of either the employee or the employer, or mutually, as outlined in the contractual stipulations agreed upon by both parties.

According to the UAE Labour Law, both the employer and employee have the right to terminate an employment contract, provided that they comply with the legal consequences of the termination. The contract can be terminated in the following circumstances:

  • If the contract term expires and it is not extended or renewed.
  • If both parties mutually agree in writing to terminate the contract.
  • If either party wishes to end the contract, provided that they observe the provisions of termination of the employment contract and the notice period agreed upon.
  • In the event of the employer’s death, if the subject of the contract is related to its entity.
  • In the event of the worker’s death or full permanent inability to work, based on a certificate issued by a medical entity.
  • Where a worker faces a final court judgment of a freedom-restricting penalty for not less than three months.
  • If the establishment is closed permanently, in accordance with the legislation in force in the UAE.
  • If the employer becomes bankrupt or insolvent or faces any economic or exceptional reasons that prevent the continuation of the project.
  • If the worker fails to fulfil the conditions for renewing the work permit for any reason beyond the control of the employer.

Notice period of termination.

If either party wishes to terminate the employment contract, they must serve a notice period of one month to three months.

During the notice period, the employee must continue to perform their work as agreed upon in the contract and are entitled to their full wage. Suppose the employer fails to serve the notice period.

In that case, they must pay the employee a notice period allowance equal to their wage for the full notice period or proportionate to the remaining period.

Employment Termination by Employer.

If the employer terminates the contract, the worker is entitled to an unpaid leave of one day per week during the notice period to search for another job.

The notice period can be reduced or exempted by mutual agreement between the two parties without infringing on any parties’ rights.

FAQs about cancellation of employment contract.

An employment contract can be terminated in several circumstances, including expiration of the contract term, mutual agreement, or termination by either party with proper notice and compliance.
Yes, the notice period for terminating an employment contract in the UAE can be reduced or exempted by mutual agreement between the employer and employee without infringing on any parties' rights.


In conclusion, the UAE Labour Law regulates the cancellation of employment contracts in the UAE.

The employer and employee have the right to terminate the contract, provided that they comply with the legal consequences of the termination. It is essential to adhere to the notice period requirements and properly fulfil the contract terms.

Al Mulla Labour Lawyer & Legal Consultant is the best for labour contract cases in the UAE. It is advisable to seek the assistance of legal professionals to ensure that your rights are protected in any employment contract matter.

Contact the office of Al Mulla via Whatsapp. Click here. Or visit us at our law firms: Dubai. You can also call us on phone: 00971501961291.

We recommend you read about the Wrongful Termination Probationary Period in UAE Dubai and the Early Termination of Contract in Dubai 2023. Also, read about the Early fixed term contract termination by the employer.

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