End of employment agreement can be complex and challenging for both the employer and the employee.
However, under the UAE’s new labour law, there are legal ways to terminate an employment contract without facing arbitrary dismissal.
This article will discuss these ways and the legal consequences of ending an employment agreement in the UAE.
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Table of Contents
End of employment agreement Valid Grounds.
- Expiration of the Contract.
If the term of the contract expires and is not extended or renewed, the employment agreement comes to an end. - Mutual Agreement.
If both the employer and employee mutually agree in writing to end the contract, the agreement can be terminated. - Unilateral Termination.
Either party can end the contract if they serve a notice period and comply with other legal consequences of termination as per Article 42 of the UAE Labour Law. - Employer’s Death.
In the event of the employer’s death, the employment contract is terminated if the subject of the contract is related to its entity. - Worker’s Death or Permanent Inability to Work.
Based on a certificate issued by a medical entity, if the worker dies or faces a full permanent inability to work, the contract ends.
The employment agreement can be terminated if a worker is subjected to a final court judgment that imposes a freedom-restricting penalty for a minimum of three months. - Establishment Closure.
If the establishment is closed permanently as per the legislation in force in the UAE, the employment agreement ends. - Bankruptcy or Insolvency.
If the employer becomes bankrupt or insolvent or faces any economic or exceptional reasons that prevent the continuation of the project, the contract can be terminated. - Failure to Renew Work Permit.
The employment agreement ends if the worker fails to fulfil the conditions for renewing the work permit for any reason beyond the employer’s control.
Termination of Employment Contract UAE Labour Law.
As per Article 43 of the UAE Labour Law, either party can terminate the employment agreement for any legitimate reason by serving a notice of 1 month (30 days) to 3 months (90 days) and adhering to other provisions.
If the party fails to serve the notice period, they must pay a notice period allowance calculated according to the worker’s last wage. Additionally, the worker is entitled to his full wage as per the contract for the notice period.
In case of the employer’s unilateral termination, the worker is entitled to an unpaid leave of one day per week during the notice period to search for another job.
The termination notice period can be reduced or exempted on mutual agreement between the two parties, without infringing any parties’ rights.
FAQs about end of employment agreement.
For any labour cases in the UAE, Al Mulla is the best labour lawyer and legal consultant to hire.
With years of experience and in-depth knowledge of UAE Labour Law, he provides comprehensive legal assistance for end of employment agreement to employers and employees.
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 Mutual Termination of Employment in UAE Dubai and learn about the Labour Law for Termination of Employment in UAE Dubai 2023.
Also, read about UAE labour law end of service gratuity.
A legal consultant specializing in UAE labor law. He regularly publishes articles on the website and writes on various areas of UAE law, with a specific focus on labor law.