Unlimited contract UAE termination in UAE is a key aspect of employment law that every worker and employer in the UAE should understand. An unlimited contract—also known as an open-ended employment agreement—is the most common form of employment in the country. However, terminating such a contract involves specific legal obligations and procedures.
In this guide, you’ll discover your rights, the correct notice periods, and the legal steps required for a smooth and lawful unlimited contract UAE termination.
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Table of Contents
What is an Unlimited Term Contract in the UAE?
An unlimited term contract (or open-ended contract UAE) offers ongoing employment without a fixed end date. Either party may terminate the agreement with notice. This structure provides flexibility but demands strict compliance with federal labour regulations to avoid legal disputes.
Legal Framework for Termination
Termination of an unlimited term contract UAE must follow Article 117–125 of Federal Decree-Law No. 33 of 2021 and Ministerial Resolution No. 1 of 2022. Key rules include:
- Notice Period: A minimum of 30 days is required, unless both parties agree otherwise in writing.
- Gratuity Rights: Employees are entitled to an end-of-service gratuity based on their tenure.
- Grounds for Immediate Termination: Permitted in cases of gross misconduct, fraud, or violation of company policies.
Employee’s Rights and Obligations
For a lawful unlimited contract UAE termination in UAE, employees are required to provide at least 30 days’ written notice or compensate the employer in lieu of that notice. However, they may resign without notice if the employer breaches contractual obligations—such as delaying salary payments or creating unsafe working conditions.
To avoid disputes, it’s essential to carefully review your employment contract and document any violations that could justify an immediate unlimited contract UAE termination.
Employer’s Responsibilities under Unlimited Contract UAE Termination in UAE
Employers must:
- Accept the correct notice period and not impose wrongful termination.
- Settle the end-of-service gratuity promptly.
- Provide an NOC (No Objection Certificate) if the employee requests a work permit or visa transfer.
Failure to meet these legal duties can lead to penalties under UAE labour law.
Step-by-Step Termination Process
Here’s a straightforward roadmap for ending an unlimited term contract UAE:
- Submit a written resignation or dismissal notice with a minimum 30-day notice.
- Serve the required period or mutually agree on compensation.
- Request a clearance letter from the employer.
- Apply for the End-of-Service Gratuity through the Ministry of Human Resources & Emiratisation (MoHRE).
- Return company documents or equipment before exit.
- Finalize termination via the MoHRE termination portal.
FAQ
Successfully managing an unlimited contract UAE termination requires a clear understanding of your rights and responsibilities under UAE labour law. Whether you are an employer or an employee, following proper procedures—such as serving the correct notice period and calculating gratuity—ensures a lawful and smooth separation. With the right legal guidance, you can protect your interests and avoid costly disputes. For tailored advice and representation, reach out to our experienced UAE labour lawyers today.
Get expert help with your unlimited contract UAE termination, contact our employment lawyers in Dubai, via the WhatsApp icon below.
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.
