Termination of Employment in UAE: Complete Guide for 2025

3 days agoLast Updated: March 9, 2025

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Termination of employment is a crucial aspect of the labor relations which are governed by strict regulations in the UAE. Either as an employer or employee, it is essential to comprehend the Termination of Employment in UAE so that you can obey the law along with protecting your rights.
This guide will cover all on employment termination in UAE, i.e., legal, termination types, rights and obligations of both parties, severance payment and remedies available in case of wrongful dismissal.

Table of Contents

Terminating employment contracts and arbitrary dismissal

Employees in the UAE and hence, employers also, may terminate an employment contract provided that a notice period is served and other legal settlements, like gratuity and final payment, have been fulfilled. Where, however, the employer unjustifiably dismisses an employee, more so if the latter has lodged a valid complaint with the MOHRE or filed legal proceedings against the company, this would constitute arbitrary dismissal. In such instances, the worker has a right to demand compensation and take legal action based on the provisions of UAE labor laws.

Legal Framework Governing Employment Termination in UAE

Federal Decree No. 33 of 2021 on the Regulation of Labor Relations, commonly known as the UAE Labor Law, sets out clear rules for termination of employment. Some of the key provisions are:

Notice period requirements
End-of-service benefits
Grounds for dismissal
Compensation for unfair termination

This law applies to private sector employees under the Ministry of Human Resources and Emirates (MOHRE), excluding domestic workers.

Legal Framework Governing Employment Termination in UAE

Types of Termination of Employment in UAE

Termination of employment in the UAE is with notice, without notice, or on probation. Termination with notice after the period of notice agreed upon is taken, termination without notice in case of misconduct or breach of contract. On probation, employers provide at least 14 days’ notice. In UAE labor law, termination can occur in different forms:

1. Termination with Notice

Employers or employees must provide a notice period (30-90 days) before terminating the contract, as per the agreement.

2. Termination Without Notice

An employer can dismiss an employee immediately under Article 44 of the UAE Labor Law, for reasons such as:

Gross misconduct
Fraud or document forgery
Unauthorized absence for 20+ days

3. Termination During Probation Period

If an employer terminates an employee during probation, a 14-day notice is required under Article 9.

Employer’s Right and Duty of Termination

In the UAE, workers can be dismissed by employers if they have sound legal grounds for doing so, i.e., misconduct or poor performance. But even here, there must be due procedure, like issuing notice periods end of service benefits and fair treatment in order to be able to escape legal consequences. Understanding employee rights in UAE is crucial to ensuring fair treatment and legal compliance.

Employers should:

Comply with UAE Labor Law regulations
Provide valid reasons for termination
Pay severance and gratuity appropriately

Workers cannot be terminated unfairly, e.g., for pregnancy, sick leave or discrimination.

Employer's Right and Duty of Termination

Employee’s Rights and Responsibilities upon Termination

Upon termination, employees are entitled in the United Arab Emirates to a notice pay period, termination gratuity upon service termination and final settlement. In addition, employees are required to give a notice period, return of company property, and settlement of any outstanding debts. Upon termination, the employees are entitled to:

Salary for the notice period
End-of-service gratuity
Compensation for unfair dismissal (if applicable)

Also, employees must settle their outstanding obligations before leaving the company.

Severance Pay and End-of-Service Gratuity

In UAE, severance pay and end of service gratuity are significant aspects of employee benefits upon termination. Gratuity under UAE labor law varies with length of service where those with less than a year term will not be entitled to gratuity, that is, users with 1 up to 5 years of service are entitled to gratuity equivalent to 21 days’ pay per annum for each year worked, while those above 5 years are entitled to gratuity equivalent to 30 days’ pay per annum. Unlimited contract based employees must give sufficient notice that they would want to receive gratuity.

What to Do If Wrongfully Terminated?

When an employee in the UAE gets wrongfully terminated, he/she may avail several legal avenues to get justice. He/She can file a complaint with MOHRE, claim damages from UAE Labor courts and get their gratuity and final settlement. If illegal dismissal is proved, the employer has to pay compensation of even upon some times to three months salary, besides other arrears payable to the employee.

Conclusion

It is essential that both employers and employees know Termination of Employment in UAE. Knowing your rights, duties and legal recourses can help in a hassle-free transition while protecting your interests. For the latest UAE labor laws, employment rights and news on legal issues, visit WikiHow. Stay updated with tips from experts, step by step guidance and the newest information on UAE workplace legislation. Don’t delay visit WikiHow today and protect your career!