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TERMINATION OF CONTRACT-LABOUR LAW-UAE


[If the employee is terminated with immediate effect, he or she] will get compensation in lieu of notice [which can be] 30 days or more, depending on the term of unlimited contract based on total salary, including allowances, or up to 90 days total salary with allowances for a limited contract.

In both cases, gratuity or end-of-service [compensation] will be paid and computed per year of service based on basic pay, no allowances.

When can a contract of employment be terminated?

An employment contract can be terminated in any of the following circumstances:

1. If the two parties agree to cancel the contract, provided that the employee consents to this in writing.

2. If the contract term has come to an end, unless the contract has been explicitly or implicitly extended according to the rules of the Law.

3. By one of the parties where the contract has an unspecified term, provided that the parties observe the provisions of the Law referred to previously regarding notice and the acceptable reasons to cancel the contract without prejudice.

Would an employment contract be terminated by the death of the employer or the disability of the employee?
An employer’s death does not constitute the termination of a labour contract, unless the subject of the contract is related to him personally. However, the contract will be terminated upon an employee’s total disability (without prejudice to his end of service benefits).
However, if the employee’s disability is partial and he is able to perform other work which suits his health, the employer should transfer the employee to such other work if the employee so requests, and should give him wages equal to those paid for similar work.

Under what circumstances can an employer terminate the employment contract without notice and with immediate effect?
An employer may dismiss an employee without notice in any of the following cases (as per Article 120 of the Law):

1. If the employee assumes a personality or a nationality other than his own, or has submitted fake documents or certificates.

2. If the employee was appointed under probation and the termination happened during that period or at its end.

3. If the employee commits a mistake causing the employer a substantial financial loss, provided the employer informs the Ministry of the incident within 48 hours.

4. If the employee violates instructions relating to safety in the place of work, provided those instructions were written and displayed in a permanent place, and the employee has been informed of these instructions orally if he is illiterate.

5. If the employee fails to carry out his basic duties as stated in the contract and continues to do so in spite of a written interrogation and a warning that his service will be terminated if he repeats his misconduct.

6. If he discloses a secret of the establishment for whom he is working.

7. If he is conclusively convicted by the concerned court of a crime involving honour, honesty and public morals.

8. If he is found drunk or intoxicated by drugs during working hours.

9. If he commits a physical assault on the employer or manager or one of his colleagues during work.

10. If he becomes absent without a legitimate reason for more than 20 intermittent days or more than seven continuous days within one year.

Can an employee terminate a contract without notice?
An employee may terminate his contract of employment without notice in either of the following cases (as per Article 121 of the Law):

1. If the employer has not fulfilled his obligation towards him as provided in the contract or in the Law, for instance where an employer does not pay his employee his wages on time.

2. If he is assaulted by the employer or his legal representative.

Would changes in the structure of a business or its ownership constitute a termination of an employment contract?
If there is a change in the structure of a business or its ownership, any contract valid during the time the change is made will remain valid and the service considered continuous. Both the previous and the new employer are jointly responsible for six months from the date of the alteration in executing the obligations relating to the contract of the employee in the period prior to the change.
After the end of this six-month period, the new employer is solely responsible for the employees of the business.

Can an employee, after the termination of his contract, be employed by another employer in the UAE?
If the nature of the position held by the employee allows him to know his employer’s clients or the trade secrets of the employer, the employer may stipulate in the contract that after the end of his contract, the employee shall not compete with him or share in any competing project. The employee has to be 21 years old at the time of signing the contract for this agreement to be legal. The agreement shall be as far as time, place and nature of work are concerned limited to what is necessary to protect the legal interests of the employer. However, if there is no agreement to the contrary, an expatriate employee may work for a new employer provided that his profession is listed in one of the categories exempted from the automatic six month or one-year ban provisions outlined below.

According to the 1999 amendment to the Law, certain employers are required to submit to the Ministry a bank guarantee as security for end of service benefits and repatriation costs related to their employees. In the event of bankruptcy, the employer is required to encash the guarantee and provide to the employee.

What are the civil/criminal responsibilities of an employer if his employee is on somebody else’s visa?
A fine of Dh10,000 will be imposed and the employer will be banned from employing additional employees or doing anything else in relation to immigration. The bar would be lifted once the Employer is no longer in violation of the Law.

What employment ban provisions apply upon the termination of an employment contract?
A one-year ban will be imposed (stamped) on an employee’s passport by the Immigration Department upon termination of employment if the employee violates the employment contract, the Law, or the labour regulations.
A six-month ban will be imposed (stamped) upon termination of employment on those who do not fall under one of the categories of professionals permitted to transfer their visas.
A six- month ban is typical and a person who wishes to be reemployed must wait until the period of six months has passed.

However, the following circumstances are exceptions to the above rules:
(a) Where the transfer of employment is from one branch to another branch of the same company, establishment or a branch owned by the same employer.

(b) Where the transfer of employment was due to the transfer of the ownership of the company, establishment or branch thereof to the ownership of another company, establishment or person.

(c) Where the sponsor has breached his liabilities which resulted in the closing of the establishment.

(d) Where a court judgment is delivered for the bankruptcy or winding and termination of activities of the establishment.

(e) Where the original sponsor has died and his heirs do not intend to continue running the establishment.

The above rules have been stipulated by Ministerial Decree No. 360 of 1997 To Issue the Executive Bylaw of the Federal Law No. (6) of 1973 Concerning the Entry and Residence of Expatriates. However, the Ministry or immigration, may, at their own discretion, grant exceptions.

Following the termination of his employment contract, when should an employee cancel his dependent’s visas?

Upon termination of his employment contract, an employee has to apply for the cancellation of his dependent’s visas (spouse, children & domestic help) before his employer submits an application for the cancellation of his visa. This is not necessary in the event of a transfer of sponsorship.

Is the employer obliged to give an end of service certificate at the end of the employee’s service?
At the end of an employee’s service, and subject to his request, an employer is obliged to provide him with a service certificate. This certificate is free of charge and should state the date the employee commenced service, the last day of service, the total service period, the nature of work carried out by the employee, his last wage and any allowances, if applicable.
The employer should also return to the employee all materials deposited with him, such as certificates, papers, instruments etc.
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Related Pages
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Abscond Reporting
Annual Leave
Air Ticket to Home Country-UAE Labour Law
Arbitrary Termination
Article 120 of UAE Labour Law
Article 121 of UAE Labour Law
Article 127 of UAE Labour Law
Ban-1 Year
Cancellation
Clearance Letter from Employee While he is in Service
Changing Employment Visa and Dependents Visa without exit
Bank Guarantee Refund
Death Compensation-Labour Law
Designations
Disciplinary Action-Labour Law
Emergency Leave
Employment Ban
Employment visa during Ban Period
Employment visa Renew
Employment rules
Employment Visa
End of Labour Relationship Between Employer and Employee
End of Service-Gratuity
E-Signature Card
Gratuity
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Labour Card Fine Calculator
Labour Card New
Labour Card Renew
Labour Contract
Labour Contract Amendment
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Labour Contract New (After Entry)
Labour Dispute
Labour Establishment Card
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Labour Fees Information
Labour Guarantee Refund
Labour Inspection for Quota Approval
Labour Law
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Non-competition clause
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Tasheel Centers-Dubai
Tasheel Centers-Abu Dhabi
Termination-Contract
Unpaid Salary
Visa Cancellation
Visa Transfer
Work Permit
Work Permit for relative Sponsored Ladies

 

   

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