The new UAE labour law on termination of contract provides more clarity and guidance to employers and employees alike.
This article will discuss the UAE labour law on terminating contracts, including the notice period in UAE new labour law, compensation, and circumstances under which employers and employees can terminate the contract.
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Table of Contents
UAE labour law on termination of contract
- Either party can terminate the employment contract.
- The terminating party must provide written notice of termination to the other party.
- The duration specified in the employment contract determines the notice period.
- The notice period could range from a minimum of 30 to a maximum of 90 days.
It is important to note that employers and employees can terminate the contract immediately without a notice period.
However, the party who did not abide by the notice period shall pay the other party compensation, a notice period allowance.
If an employer terminates the contract without notice in certain cases, they must conduct a written investigation with the employee.
- The employer has the right to dismiss the employee without notice.
- The employer is not required to pay any notice allowances in such cases.
- Dismissal may occur if the employee has impersonated someone else.
- It may occur if the employee has submitted forged certificates or documents.
- Dismissal may happen if the employee’s mistake leads to gross physical losses for the employer.
- It may happen if the employee violates the establishment’s by-law related to work safety or the workplace.
On the other hand, an employee can quit work without notice while retaining their rights upon the end of service in cases such as:
- The employer’s breach of their obligations towards the worker is stipulated in the contract.
- A grave danger at the workplace threatens the worker’s safety or health.
New labour law UAE
The Federal Labour Law No 33 of 2021 has brought about modifications to the previous labour laws in relation to the ending of employment agreements.
The new legislation has substituted “arbitrary dismissal” with “illegal dismissal”.
It has clearly defined that an employee is only regarded as having been illegally dismissed if the employer terminates their employment due to a complaint or a case filed by the employee against the employer with the relevant authorities.
UAE labour law termination benefits for arbitrary dismissal
Under the new law, the concept of compensation for arbitrary dismissal has been removed. Compensation requires evidence of dismissal due to the employee’s complaint/legal case.
Consequently, employers are now permitted to terminate employees for any legitimate reason, and employees are not entitled to claim compensation for arbitrary dismissal.
FAQs about UAE labour law on termination of contract.
Conclusion.
The UAE labour law on termination of contracts provides clear guidelines on the notice period, compensation, and circumstances under which employers and employees can terminate the contract.
Employers and employees must abide by the rules and regulations provided by the law to avoid any legal issues and disputes. In case of any confusion or legal dispute, seeking the guidance of a labour lawyer is essential.
Al Mulla Labour Lawyer & Legal Consultant is the best for labour contract cases in the UAE.
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.
Learn about the Termination of employment contracts during the probation period and the UAE labour law termination limited contract in Dubai 2023. Also, read about the Wrongful contract termination from Labor lawyer 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.