Termination of Employment in UAE: Your Rights & Responsibilities

Ending a job in the United Arab Emirates (UAE) must conform to legal actions and contracts. Whether you are a worker or an employer, it is important to be aware of the legal nature of the process so that it goes smoothly and does not end in legal trouble. This guide explains the main points about ” Termination of Employment in the UAE “.

Notice Periods

The notice period is an essential component in the process of terminating employment relationships, as it gives the employer and employee notice of the event of termination of employment.

Employer’s Notice

In most instances, employers must notify the employee before dismissing the employee. This period is normally stated in the employment contract. Nonetheless, when this is not stated, then the notice period can be based on the UAE labor law. The highlights are as follows:

• Length of the standard notice period: The default notice period as per the UAE labor law is 30 days of the yeardays unless otherwise stated in the contract.
• Influence of Employee Position: The higher-ranking jobs might have more notice periods as stipulated in the employment contract.
• Length of Service Consideration: The more an employee has served, the more days he or she may get as a notice period than the employee with less service period in accordance with the agreement stipulated in the employment contract.

Employee’s Notice

Employees, on their part, ensure that they give some notice before they give up their jobs. The terms are the following:

• Contractual Obligation: Employees will be required to comply with the terms of notice in the contract.
• Standard Notice Period: The standard notice of, generally, the employee is 30 days, which can be fluctuated based on provisions of the contract.
• Failure to Give Proper Notice: In case an employee does not provide proper notice, he/she may be liable for compensation up to the amount of the salary equivalent of the notice period.

Valid Reasons for Termination

The termination may occur due to various reasons. Nevertheless, the UAE labor law contains legal reasons that allow terminating an employment relationship.

Legitimate Reasons for Termination

• Poor Performance: In case an employee is always underpar and does not meet the work requirements, employers are allowed to terminate their employment agreement. Performance and warnings must be made properly, and by that, it must be written to eliminate controversy.
• Misconduct or Breach of Contract: This includes any type of misconduct, such as theft and dishonesty, or failure to operate within company policy codes should be a reason for termination. It is also a justification for dismissal when breaching the employment contract, such as confidentiality clauses or non-adherence to work obligations.
• Incompetence: This is where employees are found to be incompetent in terms of being unable to fulfill their roles or job requirements, and they could be terminated. Evidence of incompetency is imperative, such that no claims of unfair dismissal can be filed against the employer.

Unlawful Reasons for Termination

Employers should also not terminate employees where the reason is illegal as per the UAE labor law. These include:

• Discrimination: It is unlawful to fire an employee on discriminatory grounds or bases such as race, nationality, gender, or religion.
• Maternity: a woman working cannot be dismissed as a result of pregnancy or leave to give birth.
• Retaliation: The company is not allowed to dismiss employees on the basis of whistleblowing or the filing of complaints against the company.

Termination Procedures

During employee termination, the terminating and the terminated parties are required to adhere to a certain balance of legislation not to raise a conflict or face court implications.

Written Notice

• Formalities: The terminating message has to be delivered in writing. It is not enough to have verbal terminations
• Content: The explanation in the writing should spell out the reason for firing and when that termination takes effect. This makes it more transparent, and it prevents possible misconceptions.
• Delivery: Make sure that you deliver the notice in a manner that can show that you have successfully delivered it to the other party, like email with an acknowledgement or a registered letter.

Settlement Agreement

In certain situations, an informal resolution can be reached between the employers and employees in terms of dismissal. A settlement agreement usually involves terms and conditions regarding:

• Severance Pay: A defined amount of money to be paid out to the employee that is more than required under the legal entitlement, but depends on the level of negotiations.
• Exceptional Advantages: Unpaid vacation, overtime, or bonus pay would have to be paid off. These amounts should be stated in the agreement
• Confidentiality or Non-Compete Clauses: Employers can add clauses forbidding employees from disclosing confidential information about the company or work with a competitor during the term set in time post-termination.

Final Pay and Benefits

It is the responsibility of employers to ensure that all other payments are made upon termination of employment. A final pay includes:

• Accrued Leave Entitlement: The employees have the right to be recompensed where they have not used any of the leave.
• Overtime: Any overtime that is not recorded but was worked must be added as part of the settlement.
• Incentives or Bonuses: It would be appropriate to count incentives or bonuses in case they are available.

End-of-Service Gratuity

End-of-service gratuity is a highly important right in the UAE of workers. It is a one-time payment allocated to the worker on the basis of the duration of the employee.

Eligibility Criteria

• Minimum Service – An employee must have at least one year of continuous service before he can get a gratuity.
• Resignation- The resignation is seen as having an impact where those workers who have worked longer than one year, and less than five years, are entitled to a reduced amount of gratuity, usually two-thirds of the actual amount.

Calculation of Gratuity

• Basic Salary Basis: The computation of the gratuity is done on the amount that the employee receives on a basic salary and this includes no allowance or bonuses.
• Formula:
  • 1st 5 years: 21days basic salary per year or service.
  • And after 5 years 30 days basic salary in each additional year.

Non-Eligibility

Misconduct Failure to pay end-of-service gratuity is offered to employees who are terminated for misconduct. This encompasses instances of theft, dishonesty and being grossly negligent.

Important Considerations for Employers and Employees

There are a number of legal requirements and considerations that should be discussed to make the process of termination lawful and proceed without issues.

Visa Cancellation

• Responsibility of an Employer: The employer has the responsibility, in case the employee is on a UAE working visa, to cancel the visa after the termination.
• Period of Compliance: Visa cancellation should commence immediately after firing and must be accomplished within a 30-day window.
• Effect on the Employees: When the visa has been canceled, the employee is usually forced to leave his or her country or find a new sponsor.

Notification to MOHRE

Employers are required to inform the Ministry of Human Resources and Emiratization (MOHRE) of its terminations within the span of 30 days. This makes this termination be registered and legal.

Labor Disputes and Claims

In the case of compromise, the employee and the employer can receive the complaint in the Ministry of Human Resources and Emiratization or in the labor court. Common disagreements are

• Non-payment of Salaries or Benefits: The workforce may demand non-payment of salaries or benefits.
• Unlawful Dismissal: The workers can contest termination against them when they feel it was bogus or as a result of some discriminatory factors.

Final Words

Dismissal of work in the UAE is provided in strict legislation and rules according to which the employer and employees can be treated equally. Within the framework of the notice period, knowing the premises of termination, and undergoing the necessary procedures, as well as using the consultations of legal experts when required, the two parties can ensure that the termination process goes in a smoother and legally-compliant manner.