The choice to discontinue an employment relationship is typically tough for both the employee and the employer, and it may be unpleasant for everyone concerned. The responsibility to guarantee that the termination of the employment contract is handled effectively and following existing legislation adds to this.
Ways of Termination Contract
In most cases, a start and end date are specified in the contract’s body for a period of up to two years. The contract is automatically canceled unless both parties agree by mutual consent before the end date to either renew the contract or convert it to an unlimited duration contract. As a result, notice provisions in a limited-term contract are uncommon.
Termination by Employer
An employer may terminate a limited-term contract before its expiration date if it can be demonstrated that the employee violated one of the causes listed in Articles 120 and 88. The causes are as follows:
- If the employee assumes a fraudulent name or nationality, or if falsified certificates or papers are submitted.
- If the employee disobeys instructions concerning industrial safety or workplace safety, provided that such instructions are written and displayed in a visible location, and that, in the event of an illiterate employee, she has been made aware of them verbally.
- If the employee divulges any information about the company where they work.
- If an employee commits a mistake that causes the employer to suffer a significant financial loss, the employer must notify the labour department within 48 hours of becoming aware of the incident.
If an employer wants to stop a limited-term contract before the end date for reasons other than those listed in Articles 120, they must give the employee compensation of up to three months’ full wage or the balance of the contract’s term, which is shorter.
Termination by Employee
According to Article 121 of UAE labour law, an employee may legitimately leave without notice if the employer fails to meet his responsibilities to the employee under the terms of the employment contract, or if the employer or the employer’s legal agent assaults the employee. One of the causes might be that the employer has failed to satisfy his contractual or legal commitments to the employee.
If an employee wants to stop a limited-term contract before the end date for reasons other than those listed in Article 121, they must pay the employer compensation of up to three months’ half-salary or the balance of the contract’s term, whichever comes first.
Unlimited Term Contract
An open-ended contract has no set termination date.
Termination by Employer
An employer may lawfully terminate an employee in one of two methods under UAE labor law.
Under Article 117, an employer may fire an employee with a minimum 30 days’ notice and a maximum of 3 months’ notice. While there is no legal definition of “legitimate reason,” it must be related to work, such as poor performance or misconduct.
The UAE Labour Laws state that an employer has the right to dismiss an employee without cause if the employee engages in particular behaviours that constitute severe misconduct.
Submits false certificates or documents, or assumes a fake name or nationality.
- Probationary status with the possibility of being fired during or at the end of the probationary period.
- Disobeys instructions on workplace safety, provided that such instructions are written and displayed in a visible location, and that they are delivered verbally to the worker if he is illiterate.
- Any private information about the business for which he works is revealed.
Termination by Employee
An employee’s employment contract can be terminated by providing the employer a least 30 days’ notice and a maximum of 3 months’ notice, as provided in their contract. For one of the reasons stated in Article 121, an employee’s contract of employment may be validly ended without notice.
End of Service Gratuity
When an employee has worked for an employer for at least twelve months and is terminated, they are entitled to an end of service gratuity. The following is how the end-of-service gratuity is calculated:
- For each year of employment completed, as well as for each year of the first five years of employment, you will get 21 days of pay.
- After five years of service, you will get 30 days of pay for each additional year of employment.
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