21 Apr 2022
To govern the employer/employee relationship in the UAE, specific laws such as Labour Law No. 8 of 1980 (as amended) (the “UAE Labour Law”) are enacted. This law applies to the employment contracts concluded within the private sector companies, excluding the companies based in the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) and other government-run organizations; they have their own rules and regulations to govern these matters.
There are two types of employment contracts while hiring an employee in the UAE, limited-term or unlimited term contracts.
Both of the contracts are distinct from each other in different perspectives such as contract duration, gratuity, termination, etc. The termination of an employment contract is different in fixed term/limited contract and unlimited contract.
Limited-term contracts usually have no notice provision and expire at the end of the term or on the date specified in the contract unless terminated earlier by either party, such as an employer can terminate a contract under Article 88 and 120 of the UAE Labour Law. An employee may resign before the contract’s expiry under the provisions of Article 121 of the UAE Labour law. Whereas the unlimited term contract can be terminated after serving a notice period of 30 days or the notice period agreed on mentioned in the employment contract by either party. Moreover, it can be terminated by the employer exhausting the grounds of early termination in line with the provisions of Article 88 and 120 of the UAE Labour Law without prior notice.
Termination of employees can be carried out on the basis of of following reasons:
Article 120 of the Labour Law deals with the dismissal/termination of employees without prior notice and any end of service gratuity on the grounds stipulated in the said article; below are the reasons/grounds mentioned in Article 120 of the Labour Law when an employee:
1. adopts a false identity (fakes or conceals his identity) or nationality or if he submits forged documents or certificates.
2. Dismissal occurs during the probationary period or at the end of the said probationary period employer can validly terminate an employee by not extending the employment contract for any further term or period.
3. Commits an error that caused material loss to the employer and the employer, as long as the employer notifies the labour department of the loss/incident within 48 hours of knowing about it.
4. Violates workplace safety instructions, which are clearly displayed in writing in the workplace for the employees’ information or are verbally communicated to the uneducated employees.
5. Fails to perform his primary duties under the employment contract and continues to violate them despite formal investigation with him in this respect and issuance of a warning to him of dismissal if the same is repeated.
6. Discloses any secrets of the workplace where he is employed.
7. Convicted by the competent court in its final judgment for the offense of breaching honor, honesty, and public ethics or beliefs.
8. Found drunk or under the influence of prohibited drugs during work hours. 9. Involved in the assault of the employer, his manager, or any colleague at his workplace.
10. Absent from work without any justified reason for twenty (20) intermittent days or more than seven (7) uninterrupted days during one year.
Above mentioned reasons are mandatory for an employee’s lawful dismissal by an employer without serving upon him any notice or without granting him any end of service gratuity. If an employee believes his termination is illegal and without lawful reasons, he can approach the Ministry of Human Resources and Emiratization for his grievance’s redressal. It will try to sort out the dispute amicably; if it does not reach any settlement, it can refer the matter to any competent court to resolve the matter.