With the UAE’s dynamic private sector, understanding the regulation surrounding the termination of employment is vital.
In this article, we delve into the complex world of termination of employment entitlements in UAE, governed by the Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations in the Private Sector.
Office of Al Mulla. Whatsapp: Click here. Location: Dubai. Phone: 00971501961291.
Table of Contents
Termination of employment entitlements in UAE.
For a legitimate reason, either party in the contract can terminate the agreement, as provided in Article 43 of the UAE Labour Law. However, certain conditions must be met:
- Written Notification. A written notification must be given to the other party.
- Notice Period. A notice period of 1 to 3 months must be served.
Additional Provisions during the notice period include:
- The work agreed upon in the contract must be performed.
- The worker is entitled to his full wage as per the contract.
- In case of failure to serve the notice period, the defaulting party must pay a ‘notice period’ allowance equivalent to the worker’s wage for the entire notice period or in proportion to the remaining period.
- If the employer terminates the contract, the worker is entitled to an unpaid leave of one day per week during the notice period to look for another job.
The notice period can be reduced or waived based on a mutual agreement without infringing any party’s rights.
Employer’s Right to Terminate without Notice
Under certain circumstances outlined in the termination of employment entitlements in UAE, an employer may terminate the services of an employee without notice. These include:
- Adoption of a false identity or submission of forged documents or certificates by the employee.
- Errors committed by the employee, causing substantial material loss to the employer or deliberate damage to the employer’s properties.
- Violation of safety instructions related to workers and the workplace.
- Failure to perform essential duties under the employment contract, despite warnings.
- Divulgence of the establishment’s secrets results in losses or personal benefits.
- Being found drunk or under the influence of prohibited drugs during working hours or committing an action breaching public morals at the workplace.
- Assaulting the employer, manager, or colleagues during work.
- Unlawful absence for over 20 intermittent days or more than 7 successive days during one year.
- Illegal exploitation of the position to obtain personal gains.
- Joining another establishment without abiding by the rules and procedures.
However, the law stipulates that the employer may terminate without notice only after conducting a written investigation of the worker. The dismissal notice must be justified, in writing, and handed over to the employee.
Employee’s Right to Terminate without Notice
As per Article 45 of the UAE Labour Law, an employee has the right to terminate the contract without notice under the following circumstances:
- Failure by the employer to meet his contractual or legal obligations towards the worker after 14 working days’ notice.
- Assault or harassment of the worker at the workplace.
- The employer instructs the worker to perform work fundamentally different from what was agreed upon in the contract without the worker’s written consent.
- The employer’s failure to remove factors that pose a grave danger and/or threaten the workers’ safety or health.
New gratuity law in UAE 2023.
- Less Than 1 Year of Service:
If an employee has served for less than one year, they are not entitled to any gratuity pay upon termination. - Between 1 and 5 Years of Service:
For employees with a service duration exceeding one year but less than five years, the gratuity is calculated based on 21 days’ salary for each year of service. - More Than 5 Years of Service:
Employees who have completed more than five years of service are entitled to a full gratuity amounting to 30 days’ salary for each year of work beyond the initial five years. - Total Gratuity Limit:
In all cases, the total gratuity shall not surpass the equivalent of two years’ wage.
End of service benefits under Other Employment Types.
According to Article 30 of the Cabinet Resolution No. 1 of 2022, workers in part-time contracts or alternative work arrangements have their end of service benefits calculated differently.
The formula involves determining the percentage of the full-time contract’s value.
Considering the number of working hours in the employment contract per year in relation to the number of working hours in the full-time contract.
Compensation for arbitrary termination of employment UAE.
Article 47 of the UAE Labour Law considers dismissal arbitrary if the employee is terminated for filing a complaint or lawsuit against the employer whose validity is proven.
In case of illegal dismissal, the employee can complain to the Ministry of Human Resources and Emiratisation. If proven, the court may order the employer to pay compensation to the employee.
The compensation’s value is assessed based on the type of work, the extent of damage caused to the employee and the duration of employment, not exceeding the employee’s wage for three months.
In addition to compensation, the employee can claim his gratuity, notice period dues or any other unpaid dues he is entitled to from his employer.
FAQs about termination of employment entitlements in UAE.
Understanding the termination of employment entitlements in UAE is essential, as outlined in the UAE Labour Law. Employers and employees must meet specific conditions, including providing written notification and serving notice periods of 1 to 3 months.
Al Mulla Labour Lawyer & Legal Consultant is the best for termination cases in UAE. They bring vast experience and in-depth knowledge in handling such cases, ensuring the rights of both parties are upheld.
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.
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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.