Termination of Employment in UAE: Your Legal Rights and Employer Obligations
2025-06-24
When facing termination of employment in UAE, both employees and employers often feel unprepared. Imagine Maria, an expatriate marketing manager in Dubai, receiving sudden notice of her termination of employment in UAE without clarity on her rights.
Whether it’s contract termination, dismissal, or working relationship dissolution, understanding the legal landscape is vital.
Facing job termination? Click now on the WhatsApp icon below to connect with our UAE labor lawyer now.
Table Of Contents
Legal Basis and Grounds for Termination of Employment in UAE
Under Federal Decree‑Law No. 33/2021 and its Implementing Regulations:
- Employment contracts may end upon mutual agreement, contract expiry, death, permanent disability, employer insolvency, or criminal conviction.
- The law governs nearly all private-sector employment onshore, excluding specialized free zones like DIFC and ADGM.
- The standard notice period ranges from 30 to 90 days for indefinite contracts; during probation it’s 14 days.
Distinguishing Legitimate Termination vs. Arbitrary Dismissal
In UAE labor law, not all terminations are treated equally. It is crucial to differentiate between lawful dismissals and those considered arbitrary, as the legal consequences vary significantly. The table below outlines the key differences:
| Aspect | Legitimate Termination | Arbitrary Dismissal |
|---|---|---|
| Definition | Lawful ending of employment based on valid reasons and proper notice. | Unlawful dismissal without just cause or due process. |
| Legal Basis | Article 42 and 43 of Federal Decree-Law No. 33/2021. | Article 47 of the same law. |
| Procedure Required | Written notice (30–90 days) and documentation of cause. | Often occurs without notice, investigation, or legal justification. |
| Common Examples | Contract expiry, mutual agreement, redundancy with notice. | Dismissal due to filing a complaint or without a clear legal ground. |
| Employee Rights | Entitled to end-of-service benefits and full notice period compensation. | May claim compensation up to three months’ salary through labor courts. |
| Employer’s Risk | Low if compliant with legal procedure. | High legal exposure and financial liability if proven arbitrary. |
Notice Period and Compensation Requirements
Before terminating an employment contract, proper notice must be given. This section outlines required durations and what compensation applies when notice is not respected.
- Written notice of 30–90 days (or 14 days during probation) must be provided. Failure to do so triggers compensation equivalent to the unserved notice.
- Employers must grant one unpaid day per week to job-searching employees during the notice period.
- Full salary continues during the notice period unless waived by mutual consent.
End‑of‑Service Benefits on Employment Contract Termination
On lawful ending of service—whether at contract expiry or by the employer—employees are entitled to an end‑of‑service gratuity:
- 21 days’ basic pay per year for first five years; thereafter, 30 days per year, capped at two years’ wages.
- If the employee resigns: for service between 1–3 years, one-third of gratuity; 3–5 years, two-thirds; above 5 years, full gratuity .
Termination During Probation and Its Implications
Terminating a worker during probation follows different rules. Here’s what both employers and employees need to know to comply with UAE law in this critical phase.
- Probation period maxes at 6 months.
- Either party may end the relationship with 14 days’ written notice—or 30 days by employee for transfer agreements.
- Early termination during probation entitles the non‑defaulting party to notice compensation .
Legal Remedies for Disputes
If an employee or employer believes the termination was unlawful, there are clear steps to resolve the matter legally. This part explains the MoHRE process and court options.
- Aggrieved parties should file complaints with MoHRE, which mediates within 60 days, failing which litigation in labour courts is possible.
- Courts may award damages—up to 3 months’ salary—for unlawful termination.
Practical Tips to Avoid Disputes
Many employment disputes arise from procedural mistakes. These tips help employers and employees handle terminations correctly and reduce risks of legal conflict.
- Clearly document all notices and justification for termination.
- Always follow written investigation and disciplinary procedures before immediate dismissal.
- Ensure notice period compliance and protect employees’ unpaid rights.
- Use mutual agreement to adjust notice duration when beneficial.
How Our Lawyers Can Help in Termination of Employment Cases
Successfully handling termination of employment in UAE often requires expert legal intervention. Here’s how our experienced lawyers support clients through every stage of the process:
- Legal Review: We analyze your employment contract and the circumstances surrounding the termination of employment in UAE to determine compliance with applicable laws.
- Strategic Advice: Our team offers practical legal guidance tailored to your position—whether you’re an employee challenging a dismissal or an employer initiating one.
- Document Preparation: We assist in drafting and reviewing termination notices, settlement agreements, and resignation acceptances to ensure they meet legal standards.
- Compensation Calculation: We accurately calculate end-of-service gratuity, notice pay, and any other dues based on your length of service and contract type.
- Dispute Resolution: We file complaints with MoHRE, represent you in mediations, and if needed, escalate the matter to the labour courts for judicial resolution.
- Court Representation: Our lawyers advocate for you in hearings, leveraging deep knowledge of UAE labour law to maximize your legal protection and outcome.
FAQ
Effective termination of employment in UAE depends on knowing your rights and obligations—whether you’re ending an employment contract, dismissing staff, or facing dismissal. Proper notice, lawful grounds, and end‑of‑service payments safeguard both sides and reduce risk of disputes.
If you’re navigating an employment contract termination or facing challenges with ending a work relationship, contact our law firm in Dubai for personalized legal support.
Read more about Arbitrary Dismissal in UAE.
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