What are the Labour Rights if an Employee is Terminated or Resigned in UAE?

Either party can singly terminate a limited contract if both the parties complies with the leglal consequences of early termination. In case of unlimited contract, both party can terminate the contract if agreed mutually, or if both parties are ready to abide by the legal notice requirements and continues to honour obligations. In some cases, Arbitrary dismissal takes place when an employer terminates an employee or forces him to resign without any justifiable reasons.

For this, First you need to understand on what ground you have been terminated. Your end of service differ on whether your terminated on account of redundancy (cost cutting) or if you are terminated in what is considered arbitrary dismissal (wrongful termination) or if you are resigned by your own. The rights existing in a particular case depend on different criteria.


Employment termination by the employer:

Employer can terminate an employee if he is able to justify the termination by providing valid reason if not the termination will be considered as arbitrary. In case of your employment contract relationship terminated by the employer the labour law of the UAE provide a number of claim and they are :

1. Notice PeriodOpens in a new tab.

Employer might ask you to work during the notice period or pay you the salary for the period before letting you go.

2. End of Service GratuityOpens in a new tab.

As per the Article 132 of the Employment Law, which states: The employee who has completed one year or more in the continuous service, is entitled to the end of service remuneration at the end of his service. Days of absence from work without pay are not included in computing the period of service, and the remuneration is to be calculated as follows:

  • If an employee has served for less than 1 year, he is not entitled to any gratuity pay.
  • If an employee has served more than 1 year but less than 5 years, he is entitled to 21 calendar days’ basic salary for each year of the first five years of work.
  • If an employee has served more than 5 years, he is entitled to 30 calendar days’ basic salary for each additional year, provided the entire compensation does not exceed two years’ pay.

Provided that the entire total remuneration shall not exceed two year’s pay.”

3. Leave encashmentOpens in a new tab.

Upon termination the employee has to be compensated for unused holidays and in case of if employee has taken more leaves than his actual entitlement the same to be compensated by employee to the employer.

4. Repatriation Air ticketOpens in a new tab.

The employer should provide the air ticket fare of the employee to his/her home country provided the employee does not take up further employment within UAE.

Other costs such as shipping or family repatriation are also legally payable if agreed upon in the labour contract or as per contractual company policies.

5. Visa CancellationOpens in a new tab.

An employee may request your employer not to cancel your residence visa for a certain period until he/she finds a new employment. However, the decision to retain your residence visa is at the discretion of the employer. Charges of visa cancellation and the process are the employer’s responsibility. Employee must leave the country upon the revocation of their residence permit or the expiration of its term.

6. Certificate of Employment:

An employee can request this certificate upon the end of his or her contract, and the employer would be liable to furnish this, along with any and all certificates belonging to the employee.

In addition to above if you are been terminated arbitrary employers are liable to compensate the employee for wrongful termination which is limited to three months of employees gross salary.


Termination due to Resignation:

When an employee submit his or her resignation employer’s acceptance or rejection on employee’s resignation is not essential legally. Employee can submit the resignation by email and is considered accepted from the date of the submission. In case of limited contract, resignation is not allowed as it violates the terms, in case of an unavoidable situation you may discuss with your employer.

Employee is entitled for below claims on resignation:

1. Notice PeriodOpens in a new tab.

Employee should serve the notice period based on the employment contract which cannot be more than three months as per Law.

2. End of Service Gratuity:Opens in a new tab.

Your end of service calculation will depend on your contract type and on how long you have been employed in the company.

  • If an employee resigns before completing 1 year of service, he is not entitled to any gratuity pay.
  • If an employee has served between 1 and 3 years, he is entitled to one third (1/3) of 21 days’ basic salary as gratuity pay.
  • If an employee has served between 3 and 5 years, he is entitled to two-thirds (2/3) of 21 days’ basic salary as gratuity pay.
  • If an employee has served more than 5 years, he is entitled to full 21 days’ basic salary as gratuity pay.

3. Leave encashment:Opens in a new tab.

The employee is entitled for cash in lieu of unused annual leaves and in case of if employee has taken more leaves than his actual entitlement the same to be compensated by employee to the employer.

4. Repatriation Air ticketOpens in a new tab.:

If you are resigned your employer is not obligated to pay your air fare to your home country unless it is specified in the labour contract.

5. Visa CancellationOpens in a new tab.:

You may request your employer to cancel your visa upon completion of your notice period. Charges of visa cancellation and the process are the employer’s responsibility. Employee must leave the country upon the revocation of their residence permit or the expiration of its term or get new employment within the grace period.

6. Certificate of Employment:

An employee can request this certificate upon the end of his or her contract, and the employer would be liable to furnish this, along with any and all certificates belonging to the employee.


As per the Article 120 of UAE Labour LawOpens in a new tab. , The employer may dismiss the worker without prior notice in any of the following cases:

a – Should the worker assume false identity or nationality, or submits false certificates or documents.

b – Should the worker be appointed under probation, and the dismissal occur during or at the end of the probation period.

c – Should the worker commit an error resulting in colossal material losses to the employer, provided that the Labour Department is notified of the incident within 48 hours of the knowledge of the occurrence thereof.

d – Should the worker violate the instructions related to the safety at work or in the work place, provided that such instructions be written and posted in a prominent location, and that he is notified thereof should he be illiterate.

e – Should the worker fail to perform his main duties in accordance with the employment contract, and fail to remedy such failure despite a written investigation on the matter and a warning that he will be dismissed in case of recidivism.

f – Should he divulge any of the secret of the establishment where he works.

g – Should he be convicted in a final manner by the competent court in a crime of honour, honesty or public ethics.

h – Should he be found in a state of drunkenness or under the influence of a narcotic during work hours.

i – Should he assault during the work the employer, responsible manager or co-worker.

j – Should he be absent without valid cause for more than twenty non-consecutive days in one year, or for more than seven consecutive days.


As per the Article 121of UAE Labour LawOpens in a new tab. The worker may leave work without notice in the following cases:

a – Should the employer breach his obligations towards the worker, as set forth in the contract or the law.

As amended by Federal Law no . 12dated 29/10/1986:

b -Should the employer or the legal representative thereof assault the worker.

Deena

Human Resource professional and writer.

2 thoughts on “What are the Labour Rights if an Employee is Terminated or Resigned in UAE?

  1. what are your rights for compensation, if you are terminated for misconduct?

    1. An employee is not entitled to end of service gratuity where he has been terminated summarily for gross misconduct pursuant to the provisions of the UAE Labour Law.

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