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The Ministry of Human Resources and Emiratisation governs the relationship between employers and workers, so all parties must abide by UAE Labour Law to protect their rights from the time the contract is signed until it is terminated.
In terms of period and intent of issuance, employment contracts differ. Every category has its own set of rules that define how contracts are issued and when they are terminated.
A limited contract may be unilaterally terminated by any party as long as he follows the legal implications of doing so. In the case of unlimited contracts, an employment relationship ends when both the employer and the employee mutually agree to end the contract, or when each party agrees to end the contract as long as the termination party follows the legal notice provisions and continues to fulfil his obligations. An employer or an employee may be able to terminate an employment contract with little to no warning under such circumstances. When an employer fires or forces an employee to leave without justification, this is known as arbitrary dismissal.
Various Types of Employees Termination
Types of Employees Termination are as follows-
Termination in case of Limited Contract
A limited contract cannot last more than two years and must have a notice period of at least one month and up to three months.
Any party may unilaterally terminate the original or renewed contract, as long as he follows the legal implications of doing so, which include:
- Notifying the other party in writing at least one month in advance but no more than three months in advance
- For the length of the notice, honouring the contract obligation
- Compensating the other party up to the agreed-upon amount, as long as it does not exceed the equivalent of three months' gross wages.
A limited contract may be terminated for any of the reasons mentioned below:
- If the contract's duration ends without being extended.
- If both the employer and the employee agree to terminate it.
- if a worker violates any of the provisions of Article 120 of the Labour Code.
Termination in case of Unlimited Contract
An employment relationship is terminated in one of the following circumstances in the case of unlimited contracts:
- Both the employer and the employee agree that the contract should be terminated.
- When any party wishes to terminate the contract at any time, as long as the termination party follows the legal notice provisions and continues to honour his commitments for the length of the notice period, which must be less than one month and must not exceed three months.
- When one party unilaterally terminates the contract without giving the other party notice and without the other party's consent - in this case, the terminating party carries the legal ramifications of early termination.
Termination with no notice
In accordance with UAE Labour Law, an employment contract, whether restricted or indefinite, may be terminated without warning by any party.
The employer can terminate the contract without giving notice
If the following conditions are met, an employer can terminate an employment contract without notice and deprive the employee of his or her end-of-service gratuity:
- If he assumes a fake name or nationality, or if he presents forged documents or certificates, he will be prosecuted.
- is on probation and was fired at or at the end of the probationary period.
- commits a mistake that results in a significant material loss to the employer, given that the latter reports the incident to the labour department within 48 hours of becoming aware of it.
- Infringes on orders concerning the protection of the place of business setup if such instructions are posted in prominent places or communicated orally to an illiterate employee.
- despite a formal inquiry with him in this regard and a notice of dismissal if the same thing happens again, he fails to fulfil his basic duties under the employment contract and continues to violate them.
- discloses any secrets about the company where he works.
- is given a final judgement by a competent court for an offence that jeopardises honour, integrity, or public morality.
- Is discovered intoxicated or under the influence of banned drugs during working hours.
- In the course of his job, he assaults his boss, his manager, or some of his co-workers.
- Without a valid reason, he is absent for more than 20 days in a row or for more than 7 days in a row in a year.
Employee's employment is terminated without notice.
An employee has the right to terminate an employment contract without giving notice if the following conditions are met:
- The employer has breached his or her legal or contractual responsibilities to the employee (for example, if he fails to pay wages for a period exceeding 60 days)
- The employee has filed a lawsuit against an employer who has refused to protect the worker's jobs (for example, in case of a business shutdown or if the business has been inactive for a period exceeding two months)
- The worker wins the final decision in a labour case referred to the labour court by MoHRE.
Dismissal without cause
When an employer fires an employee or forces him to resign for no cause, this is known as arbitrary or unjust dismissal.
Arbitrary termination of an employee occurs when an employee is fired for reasons unrelated to job performance, or when an employee files a legitimate complaint against an employer, causing the latter to discharge him maliciously, according to Article 122 of the UAE Labour Law.
Article 120 of the UAE Labour Code specifies the circumstances under which a termination without warning is permissible.
If an employee claims he was fired unfairly, he may file a complaint with the Ministry of Human Resources and Emiratization. The ministry will make every effort to reach an amicable solution to the problem. If no agreement can be found, the matter will be appealed to the appropriate court.
If unfair dismissal is proved, the court will order the employer to compensate the employee, according to Article 123 of the UAE Labour Law. The value of compensation will be determined by the court based on the nature of job, the degree of the employee's damages, and the length of employment.
In both cases, the amount of compensation does not exceed the employee's salary for a three-month period, measured on the basis of the worker's most recent wage.
In addition to benefits, the employee may sue his employer for his gratuity, notice time dues, and any other unpaid dues.
What do you mean by Grace Period?
When an employment contract is terminated and a work visa is cancelled, the terminated employee is given a 30-day grace period from the date of cancellation to either obtain a new residency permit or leave the country. Illegal residents can face fines or deportation.
The Process of Obtaining a New Work Permit
Job transfer formalities are controlled by Cabinet Resolution No. (25) of 2010, and the Ministry of Human Resources and Emiratization grants a new work permit to the employee after the employment contract is completed, without the permission of the employer or the six-month ban.
In the event of unfair dismissal or if the employee is graded in the first, second, or third ability levels upon starting his new job, the employee can obtain a new work permit without having to fulfil the two-year condition.
What is the significance of termination letters?
While most employers are not required to have one, termination letters are necessary because they will help the organization retain a good image, demonstrate integrity, and provide a record of events for legal reasons.
Giving workers a termination letter is a more humane and respectful way of dismissing them. Giving workers notice gives them time to deal with external circumstances that will change as a result of their unemployment. It also ensures that staff are fully informed of the circumstances surrounding their dismissal. Maintaining respect for an employee and assisting them in their transition is critical. The employee and the employer would have a stronger relationship as a result of this.
Employers can terminate jobs at any time for any reason as long as the termination is not unfair and there is no contract or union agreement in place. A document of termination would confirm the dismissal, include a receipt of company property, and clearly outline the effective date of termination in the event of a legal conflict.