The Ministry of Labour entitles the
employee who completed two years in service with the employer to
transfer to a new employer without the need for No Objection
Certificate but for this purpose it required that the contract shall
be for unlimited period. But if the contract is for a limited period,
the employee must not break the contract before the term, otherwise,
he shall lose his labour rights. Besides, the employer would be
entitled to apply for the Ministry of Labour to impose a one-year ban
on the employee.
End of service benefits for limited contract
holder
If an employee who is bound by a limited period contract leaves his
work before the expiry of the contract period, then he/she
shall not be entitled to any end of service benefits unless he/she has
completed five years of continuous service. This is in accordance with
Article 138 of the Labour Law which states: "Where a worker who is
bound by a contract for a limited period leaves his work of his own
accord before the expiry of his contract period, he shall not be
entitled to severance pay unless his continuous period of service
exceeds five years."
Frequently Asked Questions
I am working on a limited period contract, which I renewed at
the end of two years. After a month into the renewed contract, I am
planning to join another company. Is there any legal problem in
changing the visa?
Pursuant to your queries (as I understand them), it should be noted
that you may not take up the employment with the new employer for one
year. Article 128 of Federal Law No. 8 of 1980 regarding Regulation of
Labour Relations (Labour Law) states, 'Where a non-national worker
leaves his work without a valid reason before the expiry of a contract
for a limited period, he may not, even with the employer's consent,
take up other employment for one year from the date on which he left
his work. It shall not be lawful for any other employer who is aware
of the fact to recruit such worker to keep him in his service before
the expiry of such period.'
In case your current employer is willing to provide you the NOC to
work with another employer then the issue of labour ban may not arise.
But in case your employer is not willing to provide the NOC and wish
to cancel your labour contract, the Ministry of Labour may impose a
labour ban on you.
However, in the event a ban gets imposed, your prospective employer
may apply for lifting the ban based on your professional qualification
and or as per the salary offered by your prospective employer.
Any party breaching a limited period employment contract may
compensate the other party by:
(a) In case of breach by the employer: The employer shall be liable to
compensate the employee with three months of remuneration as stated in
Article 115 of the Labour Law, which reads as follows: 'Where an
employment contract is for a definite term and the employer revokes it
for reasons other than those specified in Article 120 he shall be
required to compensate the worker for any damage the latter sustains,
provided that the amount of compensation shall in no case exceed the
aggregate wage due for a period of three months or the remaining
period of the contract, whichever is shorter, unless otherwise
stipulated in the contract.'
(b) In case of breach by the employee: The employee shall be liable to
compensate the employer for up to half the employee's remuneration for
three months in accordance with Article 116 of the Labour Law which
reads as follows: 'Where a contract is revoked by the worker for
reasons other than those specified in Article 121, he shall be
required to compensate the employer for any damage the latter sustains
as a result, provided that the amount of compensation shall not exceed
half a month wage for three months or for the remaining period of the
contract, whichever is shorter, unless otherwise stipulated in the
contract.'
A limited contract cannot be terminated
before completion
Q: My wife has been working in a
ladies saloon for almost four years under a contract for limited
period which expires next year, she is on my sponsorship. My questions
here are; Can my wife leave work immediately or by giving three months
notice to the company as per the side contract not
labour contract? The side contract mentions three months
notice. If the company does not accept the resignation, will the
Ministry of Labour impose a work ban on my wife, though she is under
my sponsorship? Is it a must to work during the notice period in a
limited contract? Please advise.
A: Your wife is working on a contract for a limited period
and if the contract is terminated pre-term, she will lose her labour
rights except the right related to leave only. Also, the wife might be
requested to compensate the employer an amount equivalent to a salary
of 45 days if the employer proves that he suffered a loss or was
affected by such behaviour.
Finally, the employer might request the Ministry of Labour to impose a
one-year ban on the wife due to this violation even if the wife is not
under the company's sponsorship. There is no notice period
in a limited contract (GN).
Breaking a limited contract
Q: I am working in Sharjah under a two-year limited contract.
Recently, I was offered a job in a Dubai-based company and they want
me to join by next month. Can I resign before end of the contract?
A: As per Article 116 of the UAE Labour Law, you shall be
required to compensate your employer for any loss he may sustain as a
result of the termination of the contract, provided that the amount of
compensation shall not exceed half the workers remuneration for three
months or the residual period of the contract whichever is shorter
unless the contract contains a provision to the contrary. Therefore,
you need to inform your employer in advance that you wish to resign.
However, the employment agreement, according to Article 113, can be
terminated only by both parties’ acceptance. This can be done through
submitting a resignation to the employer and giving a notice period of
45 days.
Compensate employer if you don’t serve notice period
If the employment contract is of unlimited duration, employee has
the right to terminate the employment by giving a prior notice of 30
days.
I have been working at an entity based at the
Jebel Ali Free Zone (JAFZ) in Dubai for the last 20 months. I
submitted my resignation on a notice period of 15 days instead of the
required 30 days, as I had to return to my home country urgently. The
company had sent me for offshore field service jobs and also gave me
some training during this period. The company has asked me to repay
the money it spent on my visa and training, along with 45 days' full
salary, to proceed with the cancellation process. Do I have to pay the
money?
You have not mentioned about the nature of your employment contract as
to whether the same is of limited or unlimited duration. And
therefore, our response is based on your working on an unlimited
period employment contract vis-a-vis limited period employment
contract. In accordance with the labour regulations applicable at the
JAFZ, the presence of a written contract drawn on JAFZA template
signifies the existence of a limited period contract. Otherwise, it is
presumed that the employer and the employee have an unlimited period
contract between them. Owing to this, the rules pertaining to
termination of employment will follow the provisions of the Federal
Law No 8 of 1980 on the Regulation of Labour Relations (the Labour
Law).
In view of the foregoing, if your employment contract is of unlimited
duration, then you are within your rights to terminate your employment
by giving a prior notice of 30 days. This is in accordance with
Article 117 of the Labour Law which states:
'(1) Both the employer and the worker may terminate a contract of
employment of unlimited duration for a valid reason at any time
following its conclusion by giving the other party notice in writing
at least 30 days before the termination.'
However, it may also be noted that if the employee fails to give
proper notice of termination or reduces the period of notice, then he
shall be liable to compensate his employer for the number of days so
reduced. This is in accordance with Article 119 of the Labour Law
which states:
'Where an employer or a worker fails to give the other party notice of
the termination of the contract or reduces the period of notice, the
party obliged to give notice shall pay the other party compensation,
called 'compensation in lieu of notice' even where no prejudice has
been sustained by the other party as a result of such failure or
reduction. The said compensation shall be equal to the worker's
remuneration in respect of the entire period of notice or the time by
which it was reduced. Compensation in lieu of notice shall be
calculated on the basis of the remuneration last received, the case of
worker remunerated on a monthly, weekly, daily or hourly basis or in
the case of a worker remunerated at piece rates, on the basis of the
average daily remuneration referred to in article 57 of this Law.'
Pursuant to the foregoing, if you were employed under an unlimited
period contract, and you had given a prior notice of 15 days instead
of the required 30 days, then you shall be liable to compensate your
employer for the reduced period of notice that is, your salary for 15
days calculated on the basis of your last drawn full salary.
If however, your employment was of limited duration, you will be
liable to compensate your employer with an amount equal to your 45
days' remuneration. This is in accordance with Article 116 of the
Labour Law which states:
'Where a contract is revoked by the worker for reasons other than
those specified in
Article (121), he shall be required
to compensate the employer for any damage the latter sustains as a
result, provided that the amount of compensation shall not exceed half
a month wage for three months or for the remaining period of the
contract, whichever is shorter, unless otherwise stipulated in the
contract.'
In view of this, you may be required to compensate your employer for
an amount, which is equal to your salary for 45 days.
Further, you are not required to repay your employer for the cost of
your employment visa, as this is against the laws of the UAE. The
issue of repayment of training expenses will depend on the applicable
regulations in JAFZ and also in accordance with the specific tewrms in
your employment contract with respect to training.
In view of the foregoing, you may try and prevail upon your employer
to cancel your visa in accordance with the law. However, if you and
your employer fail to settle the matter amicably, in accordance with
the provisions of law, you may consider to approach the relevant
section at Jebel Ali Free Zone Authority, which deals with the
disputes between the employers and employees.
(KT)
Q: I am working on a limited period contract, which I renewed at
the end of two years. After a month into the renewed contract, I am
planning to join another company. Is there any legal problem in
changing the visa? Do I need to give any money to my current employer?
A: Pursuant to your queries, it should be noted that you may
not take up the employment with the new employer for one year. Article
128 of Federal Law No. 8 of 1980 regarding Regulation of Labour
Relations (Labour Law) states, 'Where a non-national worker leaves his
work without a valid reason before the expiry of a contract for a
limited period, he may not, even with the employer's consent, take up
other employment for one year from the date on which he left his work.
It shall not be lawful for any other employer who is aware of the fact
to recruit such worker to keep him in his service before the expiry of
such period.'
In case your current employer is willing to provide you the NOC to
work with another employer then the issue of labour ban may not arise.
But in case your employer is not willing to provide the NOC and wish
to cancel your labour contract, the Ministry of Labour may impose a
labour ban on you.
However, in the event a ban gets imposed, your prospective employer
may apply for lifting the ban based on your professional qualification
and or as per the salary offered by your prospective employer.
Any party breaching a limited period employment contract may
compensate the other party by:

(a) In case of breach by the employer: The employer shall be liable to
compensate the employee with three months of remuneration as stated in
Article 115 of the Labour Law, which reads as follows: 'Where an
employment contract is for a definite term and the employer revokes it
for reasons other than those specified in
Article 120 he shall be required to
compensate the worker for any damage the latter sustains, provided
that the amount of compensation shall in no case exceed the aggregate
wage due for a period of three months or the remaining period of the
contract, whichever is shorter, unless otherwise stipulated in the
contract.'
(b) In case of breach by the employee: The employee shall be liable to
compensate the employer for up to half the employee's remuneration for
three months in accordance with Article 116 of the Labour Law which
reads as follows: 'Where a contract is revoked by the worker for
reasons other than those specified in
Article
121, he shall be required to compensate the employer for
any damage the latter sustains as a result, provided that the amount
of compensation shall not exceed half a month wage for three months or
for the remaining period of the contract, whichever is shorter, unless
otherwise stipulated in the contract.'
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Related Pages
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Abscond Reporting
Annual Leave
Air Ticket to Home Country-UAE Labour Law
Article 120 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
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Period
Employment visa Renew
Employment rules
Employment
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End of Labour Relationship Between Employer and
Employee
End of Service-Gratuity
E-Signature Card
Gratuity
Haj Leave
Labour Card Fine Calculator
Labour Card New
Labour Card Renew
Labour
Contract
Labour
Contract
Amendment
Labour Contract FAQs
Labour Contract New (After Entry)
Labour Dispute
Labour
Establishment
Card
Labour Establishment Card Amendment
Labour Fees Information
Labour
Guarantee Refund
Labour Inspection for Quota Approval
Labour Law
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Lost Labour Card
Maternity
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Non-competition clause
Notice Period
Occupational Disease
Overtime
Part-time Work Permit
Payment
of Wages-UAE Labour Law
Probation
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PRO
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Profession Change
Professions
Salary increment
Severance Payment
Sick Leave
Temporary Work Permit
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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
Ministry of Human Resources and Emiratisation-
MOHRE
Timing: Saturday to Thursday
7:30am to 7:00pm
Call Centre: 800 60
Website:
www.mohre.gov.ae
Tags: What is
limited contract and Unlimited contract in UAE? Can I resign from the
job before completion of my limited contract? |