UAE Notice Period and Termination Rules: Complete Employer Guide

Standard Notice Period

Under Article 43 of the UAE Labour Law:

Notice Period by Situation

Payment in Lieu of Notice

Either party may choose to pay wages instead of serving notice period:

Payment in Lieu = (Monthly Salary / 30) x Notice Period Days

Example:

• Monthly salary: AED 15,000
• Notice period: 30 days
• Payment in lieu: AED 15,000

Standard Resignation Steps

1. Submit written resignation to employer
2. State intended last working day
3. Serve notice period as per contract
4. Complete handover responsibilities
5. Receive final settlement

Required Documentation

• Written resignation letter
• Date of submission
• Proposed last working day
• Acknowledgment from employer

During Notice Period

Employee must:

• Continue working as normal
• Complete assigned duties
• Participate in handover
• Train replacement if requested

Employer must:

• Continue paying full salary
• Provide work as normal
• Not assign punitive tasks
• Process clearance documentation

Standard Termination Requirements

1. Valid reason (though not required by law to be disclosed)
2. Written notice of termination
3. Full notice period or payment in lieu
4. Final settlement within 14 days

Employee Entitlements on Termination

• Full salary during notice period
• End of service gratuity (if 1+ year service)
• Payment for unused annual leave
• Repatriation (if contractual)

Special Protection Situations

Termination During Sick Leave:

• Generally prohibited
• Exception: After 90 days sick leave exhausted
• Employee entitled to all benefits if terminated during sick leave

Termination During Maternity Leave:

• Prohibited during maternity leave
• Exception: Gross misconduct under Article 44
• Full protection during leave period

Grounds for Immediate Termination

Employer can terminate immediately without notice if employee:

Employee Immediate Resignation (Article 45)

Employee can resign immediately without notice if:

• Employer breaches contract obligations
• Employer assaults employee or allows harassment
• Workplace endangers employee's health/safety
• Employer assigns fundamentally different work without consent
• Wages unpaid for 60+ consecutive days

Settlement Components

Allowed Deductions

• Outstanding loans
• Advances
• Damages caused by employee
• Other legitimate debts

Payment Deadline

Employer must pay final settlement within 14 days of contract termination.

Example Calculation

Employee Details:

• Basic salary: AED 10,000
• Service period: 3 years, 4 months
• Unused annual leave: 15 days

End of Service Gratuity:
- Daily wage = 10,000 / 30 = AED 333.33
- Gratuity = 333.33 x 21 x 3.33 = AED 23,310

Unused Annual Leave:
- Daily basic = 10,000 / 30 = AED 333.33
- Leave payment = 333.33 x 15 = AED 5,000

Total Settlement: AED 28,310

Employee Obligations

Employer Obligations

Visa Grace Periods

Filing a Complaint

1. File complaint with MOHRE (online or in person)
2. MOHRE attempts mediation (2 weeks typically)
3. If unresolved, referred to Labor Court
4. Court issues binding judgment

Time Limits

• Labor claims: Must be filed within 2 years of employment termination
• MOHRE complaints: No specific limit, but earlier is better
• Court cases: Referred by MOHRE if mediation fails

MOHRE Decision Enforcement

Under 2024 amendments, MOHRE decisions have legal enforceability for claims under AED 50,000.

Non-Payment Penalties

• Employee can file complaint with MOHRE
• Employer may face fines
• Interest may be payable on delayed amounts