The UAE labour law termination pay is an important aspect that both employees and employers must understand.
The rules and regulations concerning employment termination are outlined in the Federal Decree-Law No. 33 of 2021.
This article aims to understand these provisions, especially those related to notice periods and compensation during the job contract ending.
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Table of Contents
UAE labour law termination pay and Notice Period.
The company must offer financial compensation if an employer dismisses an employee without serving the notice period.
According to Article 43 (3) of the Employment Law, the party in breach of the notice period must pay the other party compensation, known as pay in lieu of notice.
This compensation should be equivalent to the employee’s salary for the entire notice period or the remainder thereof.
Arbitrary Termination Compensation.
The UAE labour law also includes provisions for compensation in case of arbitrary termination. Terminating could be considered arbitrary if an employer terminates an employee’s contract without a valid reason.
In such cases, per Article 47 of the Employment Law, the employer may have to compensate the employee up to three months’ salary.
FAQs about UAE labour regulation termination pay.
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We recommend you read about Labour Law Termination Employment in UAE Dubai 2023 and Negotiating wrongful termination settlement in UAE Dubai.
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.