UAE: Can expat employees ask employers to add a severance package to contract?

Question: I have been offered a high-profile position in a company based in Dubai and am planning to move to the UAE. Can I work in a severance package in my contract which would allow me to get an amount of money if I lose my job? How does that work? Please advise.

Answer: In the UAE, an expatriate employee who has completed at least one year of continuous service is entitled to end-of-service benefits at the end of his or her service with an employer.

The amount due to an employee for end-of-service benefits is calculated on the basic salary. This is in accordance with Article 51(2) of the Federal Decree Law no. 33 of 2021 Regarding the Regulation of Employment Relationships and its amendments, which provides for the end-of-service benefits.

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“The full-time foreign employee, who completed a year or more in continuous service, shall be entitled to end-of-service benefits at the end of his service, calculated according to the basic salary as per the following:

a. A salary of (21) twenty-one days for each year of the first five years of service;

b. A salary of (30) thirty days for each year exceeding such period.”

Furthermore, Article 8 of the Employment Law read with Article 10 (1) of the Cabinet Resolution No. 1 of 2022 on the Implementation of Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relations, provides for the general information that could be included on the employment contract which reads as:

“The employment contract should include the name and address of the employer, the name, nationality and date of birth of the employee, proof of his identity, his qualification, the job or occupation, the date of work commencement, the workplace, the working hours, the rest days, the probationary period, if any, the term of the contract, the salary agreed upon including the benefits and allowances, the annual leave entitlements, the notice period, the procedures for terminating the employment contract and any other data determined by the ministry in order to regulate the relationship between both parties.”

Based on the aforementioned provision of law, it is not mandatory to include your end-of-service entitlements in an employment contract signed between you and your prospective employer as the provisions of the Employment Law and its subsequent cabinet resolutions of Employment Law will protect your interests as an employee pertaining to all your employment rights in the UAE, including your end-of-service benefits.

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