[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
When can a contract of employment be terminated?
An employment contract can be terminated in any of the following
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
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
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
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
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
(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
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