Termination under UAE labour law: notice, pay and rights

Lawful grounds for ending an employment contract

Article 42 of Federal Decree-Law No. 33 of 2021 lists the cases in which an employment contract ends:

• Agreement or expiry. You both agree in writing, or a fixed term ends without extension or renewal.
• One party's request. Either side ends it under the law's termination rules and the contract's notice.
• Death, disability or prison. The employer dies, where the contract depends on them personally; or the worker dies, is certified totally and permanently disabled, or gets a final sentence of at least three months.
• Closure or insolvency. The business closes permanently, the employer is bankrupt or insolvent, or economic or exceptional circumstances stop it continuing.
• Work permit. The worker can't meet renewal conditions, for reasons beyond your control.

The law has no separate redundancy procedure or redundancy pay. Under Article 25 of the Executive Regulation, a bankruptcy or insolvency judgment, or an official decision that you can't resume activity for exceptional economic reasons, ends the contract; after a bankruptcy judgment MOHRE may cancel the permit and grant a new one.

The law covers the private sector. The UAE government portal says free zone staff are generally governed by their free zone's employment regulations together with this law; DIFC and ADGM have their own frameworks. Domestic workers fall under Federal Decree-Law No. 9 of 2022. If the worker is the one leaving, see resignation.

Notice periods and pay in lieu of notice

Article 43 lets either party end the contract for a legitimate reason with written notice. The notice is the period in the contract: at least 30 days and no more than 90, and the same for both sides unless a difference favours the worker. In probation, Article 9 requires the employer to give at least 14 days' written notice; see probation period.

The contract stays in force during notice: the worker gets their full wage and works if you ask. You can agree to waive or shorten notice, preserving the worker's rights for the agreed period. Skip notice and you owe a notice allowance: the last wage for the whole period or the unserved part, even if no harm results. When you end the contract, the worker may take one unpaid day a week to job-hunt, telling you three days ahead.

• Worker on leave. If either side ends the contract during leave, notice starts the day after the worker is due back, unless you both agree otherwise (Article 35).
• Pregnancy and maternity. You can't dismiss a worker, or give notice, because of pregnancy or maternity leave (Article 30).
• Ill health. You can't end service for lack of health fitness before the worker has used their legal leave (Article 46). If they can't return after sick leave runs out, you may end service and pay all dues (Article 31).

Dismissal without notice for misconduct

Article 44 allows dismissal without notice for: forged documents or a false identity; a mistake causing grave material loss, or admitted deliberate damage (tell MOHRE within seven business days of learning of it); breaking displayed safety rules the worker knew of; repeatedly failing basic duties after a written investigation and two warnings; disclosing work secrets, causing loss or gain; being drunk or on drugs at work, or an act against public morals there; assaulting you, a superior or a colleague at work; unexcused absence of more than 20 non-consecutive days in a year, or more than seven consecutive days; exploiting the job for personal gain; and working for another establishment without following the procedures.

The law and its Executive Regulation set the process:

• 1. Charge in writing. Tell the worker in writing what they're accused of. A violation discovered more than 30 days earlier can't be charged (Executive Regulation, Article 24).
• 2. Investigate in writing. Hear the worker's statements and defence and record them in a report for their personal file. You may suspend them for up to 30 days on half wage, paid back if the case is shelved, no violation is found or it ends with only a warning (Article 40).
• 3. Decide within 60 days. No penalty can be imposed more than 60 days after the investigation ends and the violation is established.
• 4. Hand over the decision. The dismissal must be in writing, reasoned and handed to the worker (Article 44).

Dismissal doesn't cancel gratuity: Article 39 lists it as a penalty "while preserving the Worker's right to end-of-service gratuity".

Unlawful dismissal and compensation

Article 47 makes a termination unlawful if it's because the worker filed a serious complaint with MOHRE, or a case against you that was proven true. The competent court sets fair compensation, considering the type of work, the worker's loss and length of service. It can't exceed three months' wage based on the last wage, and it comes on top of the notice allowance and gratuity.

The UAE government portal says the worker can complain to MOHRE, and unresolved cases go to court. MOHRE handles complaints and decides claims up to AED 50,000, which either side can challenge in court.

End-of-service entitlements and the 14-day rule

Gratuity is for foreign full-time workers with at least one year's continuous service: 21 days' basic wage for each of the first five years and 30 days for each later year, capped at two years' wage (Article 51). Part-time workers get a pro-rata share (Executive Regulation, Article 30). Unused annual leave is paid in cash on basic salary (Executive Regulation, Article 19).

Article 13 makes you bear the cost of returning the worker to where they were recruited from, unless they've joined another employer or caused the termination, and give a free experience certificate on request. Article 53 requires all wages and entitlements within 14 days of the contract ending; under Article 51, amounts due by law or judgment can be deducted from gratuity. See how gratuity is worked out, or use our gratuity calculator for an estimate.

Termination letter, work permit and visa cancellation

• 1. Serve written notice. Article 43 requires it; a clear letter gives the date, the notice period and the last working day.
• 2. Settle final dues. Pay wages, notice pay, gratuity and leave balance within 14 days of the contract ending.
• 3. Cancel the work permit. The UAE government portal says you apply to MOHRE to cancel the labour contract and work permit; the employee signs it and a letter confirming they've received their wages and end-of-service benefits.
• 4. Cancel the residence visa. Apply to ICP after MOHRE. Grace periods run up to six months by resident category, and overstaying costs AED 50 a day. See visa cancellation.

Global Sky PRO prepares termination and HR letters, final settlement paperwork, MOHRE cancellations and visa cancellations; the authorities decide each application. We're not a law firm. Employers can use our HR and payroll services, and workers can get help filing a labour complaint.