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UAE labour law: Notice period, compensation for terminating job contract; all you need to know

What’s the notice period that must be served?

Question: I work in a private firm in mainland Dubai. Are there any rules around terminating the services of an employee? What’s the notice period that must be served? And does the company have to offer any compensation under any circumstances?

Response: Pursuant to your queries, as you are employed by a mainland firm based in Dubai, the provisions of Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations (the ‘Employment Law’) are applicable.

In the UAE, an employer or an employee may terminate the job contract by serving a notice period as stipulated. This is in accordance with Article 43 (1) of the Employment Law, which states: “Either party to an Employment Contract may terminate the contract for good cause, by giving the other a notice in writing. The employee shall perform his duties during the notice period agreed upon in the contract, provided that the notice period is not less than 30 days and not in excess of 90 days.”

In some instances, an employer may terminate the services of an employee without serving notice period in writing and upon completion of internal investigation in writing as mentioned in Article 44 of the Employment Law. This may be done if an employee submits false documents; fails to follow the instructions of the employer; fails to perform the duties; reveals business secrets of the employer to third parties; is found in a state of drunkenness or under the influence of drugs; commits immoral activities at the workplace; verbally or physically abuses the employer or colleagues; absents from work for seven consecutive days or 20 non- consecutive days, etc.

Additionally, an employee may terminate the contract without notice as mentioned in Article 45 of the Employment Law. This may be done if the employer does not fulfil the conditions laid down in the employment contract; assaults the employee; or assigns the employee another work without his or her consent.

If an employer does not serve the notice period to the employee, then monetary compensation is must. This is in accordance with Article 43 (3) of the Employment Law, which states: “The party in breach of the notice period shall pay the other a compensation called pay in lieu of notice, even if no harm results from the failure of notification. The compensation shall be equal to the salary of the employee for the entire notice period, or the remainder thereof.”

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Further, if an employer terminates the contract without a valid reason, this may be considered ‘arbitrary’ and the employer may have to monetarily compensate the employee with up to three months’ salary. This is accordance with Article 47 of the Employment Law.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.