An unlawful dismissal of an employee is not a very common scenario in UAE. It's because UAE Labour law has clear rules and regulations that keep employers bound. However, when an employee thinks that his contract is terminated unlawfully, he can take this matter to the Ministry of Human Resources and Emiratisation. Today, I will share details of termination of an employee contract both limited and unlimited. Let's get started. 

What is a Limited Employment Contract?

It is a contract between employee and employer when the start and end date of contract is mentioned, which is usually less than two years.This contract must have clear specification of notice period that could be one month (min) to three months (max).

Once the ending date of the contract reaches, the employer can either let it expire or renew it.

In some cases, early termination of a limited employment contractor occurs in which both parties mutually agree and follow the legal requirements and obligation of contract during notice period. There is a need to give notice at least one month before. Employers usually compensate other parties during notice period. However, this compensation shouldn't exceed three month wages.

On what ground termination of a Limited Employment contractor happens.

• When the expiry date reaches and no one renews it.
• When both parties agree to terminate the contract.
• When employee breaches contract or commit any violations that clearly mentioned under Article 120 of the Labour Law

What is an Unlimited Employment Contract in UAE?

It is a kind of open-end contract where the end date is not mentioned.

Here is how unlimited employment contract termination happens in the UAE.

• When both parties mutually decide to terminate the contract.
• When one party decides to terminate the contract and follow notice period guidelines. He/she needs to complete his contractual obligations during notice period, which could be minimum one month but not longer than three months.
• When one party decides to terminate and doesn't follow notice period guidelines and obligations of his contract. In that scenario, the Terminating party needs to face the music on its own aka legal consequences of early termination of unlimited employment contract.

Termination of Contract Without Notice

If you are wondering whether an employment contract can be terminated without notice in UAE then yes, it's quite possible that you don't get any notice and lose your job. However, there are some situations when this happens. Continue reading to find out more.

Situations When Employer Terminates Contract without Notice 

Here are some situations when an employee is terminated without notice and the employer doesn't give him his end of service gratuity. 

When an employee :

• submits forged documents or certificate
• Mentions false identity or nationality
• is appointed on probationary period and the employer decides to do dismissal.
• is a main cause of huge material loss to employers, who will report this incident within 48 hours to the Labour department.
• Violates safety instructions at the workplace, especially when these instructions are written or an illiterate employee gets their information verbally.
• Doesn't perform well under his employment contract and remains persistent in this violation regardless of formal investigation and warning of dismissal.
• Discloses establishment secrets and confidential information
• Gets final judgement from court due to an offense prejudicing honesty, public morals and honour.
• found drunk or under the drug influence during working hours.
• Commits assaults of employer, manager or any colleague during his work.
• Remain absent without any lawful excuse for almost twenty intermittent days or more than seven successive days in one year/

Situations When Employee Terminates Contractor Without Notice

Here are some situations when an employee ends a contract without giving any prior notice.

• Termination of contract without notice by the employee
• If an employer doesn't meet contractual and legal obligations toward employees. For example, if he doesn't pay wages of almost two months.
• The Employee files a court complaint in the court as he fails to secure his employment. It could be due to business shutdown or business activities are inactive for more than two months. 

What You Should Know About Unfair dismissal in UAE?

It is also known as Arbitrary dismissal. In this situation, the employer terminates an employment contract or forces him to resign while he doesn't have any legal reasons and grounds for this action. 

According to Article 122 of the UAE Labour Law, a dismissal will be considered unlawful, when an employee ends the contract without any performance or work related reasons. Another situation is when an employer terminates this contract because an employee files a legit complaint against him. 

What to Do when You are fired by Your Employer Without any Lawful Reasons?

If termination of an employment contract is illegal, you can file a complaint to the Ministry of Human Resources and Emiratisation.  They will solve the issue and if settlement doesn't occur then this case will be given in the hand of the respective court. 

How an Employee is Compensated for Illegal Termination?

When it is proved that the employer terminated the employee contract due to unlawful reasons then he is entitled to compensate his employee. The compensation is usually not more than three month wage of an employee.

Court will calculate this compensation after considering the type of work an employee does and the extent of damage he faces and his employment duration.  An employee can also submit claims for his service end gratuity, unpaid dues or notice period dues alongside compensation from an employer.

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How Many days you have after employment contract Termination?

If you are not resident of the UAE, then you will have thirty days to secure a new resident permit or leave the country.As your work visa is cancelled, you need to obtain a new one. After the grace period, you may need to pay a fine or get deported as you become an illegal resident. 

What If Notice Period Requirement isn't fulfilled?

If one party doesn't comply with notice period requirement as per employment contract provision or law then another party can claim payment for complete or reduced notice period. The compensation will be based on the last salary that an employee received.

How to Calculate End of Service Gratuity?

When an employee completes twelve month of continuous employment then he is entitled to receive gratuity upon their employment. It is calculated in the following manner, when the employer terminates the contract.

• 21 days of wages for every year of employment complete for the first five years of employment.
• After five years of employment, 30 days of wage for each additional year of employment. 

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End of Service Gratuity Calculation, If Employee Terminates Contract

If you are employed under a limited contract, you are not entitled for this end of service gratuity unless you have been working for an employer for over five years. 

However, when you are hired with an unlimited term contract and complete one year of continuous service for your employer. You are entitled to receive payment for the end of service but at a reduced rate mentioned below.

• In the first three years of employment, one third of 21 days basic wage for every service year.
• For third to fifth years of employment, two-thirds of 21 days basic wage for every service year
• For five year employment, full 21 days basic wage of each year
• For five plus year employment, 30 days of basic wage for each additional year. 
• You should keep in mind that this end of service gratuity shouldn't exceed 2 year wage in any case.

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