UAE Termination Letter Guide

UAE Labour Law recognises several distinct routes for ending employment, and the correct letter depends entirely on which one applies. The main categories are termination with notice by either party, termination for cause without notice under Article 44, termination during probation, mutual agreement, and expiry of a fixed-term contract that is not renewed. Each route has its own grounds, notice rules, and settlement consequences, so the first step before drafting any letter is to identify precisely which type of termination is taking place.

The lawful grounds differ sharply between ordinary termination and termination for cause. Ordinary termination requires only a legitimate, non-discriminatory business reason and full notice — for example redundancy, restructuring, or documented poor performance following warnings. Summary dismissal without notice, by contrast, is only lawful on the specific grounds listed in Article 44, such as assuming a false identity, committing an error causing substantial loss, violating safety instructions after warning, or unauthorised absence for more than 20 non-consecutive (or 7 consecutive) days. Using an Article 44 ground that the facts do not support is a common and costly mistake.

Notice periods are set by law and cannot be waived to the employee's disadvantage. The standard notice for either party to end a contract is a minimum of 30 days and a maximum of 90 days, as agreed in the contract; during probation, an employer must give at least 14 days' notice, while an employee moving to another UAE employer during probation must give 30 days. If the employer chooses not to have the employee work the notice, it must pay the salary for that period in lieu. Failing to give or pay proper notice is itself a breach that strengthens any later claim by the employee.

Use the template below for a standard termination with notice, and adapt the ground and notice period to the specific case. Always issue the letter on company letterhead, state the reason clearly, reference the contractual notice, and keep a signed copy on the employee file.

[Company Letterhead]

Date: [DD/MM/YYYY]

Private & Confidential

Mr./Ms. [Full Name]
[Job Title] — [Employee ID]

Subject: Termination of Employment

Dear [Name],

We write to formally notify you that your employment with [Company Name] will end effective [Last Working Day], in accordance with Article [__] of UAE Labour Law and clause [__] of your employment contract.

The reason for this termination is [state the specific, factual reason].

You are entitled to [__] days' notice / payment in lieu of notice. Your final settlement, including end-of-service gratuity, accrued leave, and any outstanding dues, will be calculated and paid in accordance with UAE Labour Law.

Please coordinate with HR regarding the return of company property and the handover of your responsibilities.

We thank you for your service and wish you well.

For [Company Name]
[Authorised Signatory Name]
[Designation]
[Signature & Company Stamp]

On termination, the employer must calculate and pay a full and final settlement, and doing so incorrectly is one of the most common sources of post-exit disputes. The settlement must include end-of-service gratuity calculated on the basic salary (21 days' pay per year for the first five years and 30 days' pay per year thereafter, subject to the statutory cap), payment for any accrued but untaken annual leave, salary up to the last working day, payment in lieu of notice where applicable, and any other contractual dues such as pending commissions or reimbursements. The settlement should be documented and paid within 14 days of the end of employment.

A dismissal is treated as arbitrary when it is not based on a legitimate work-related reason — for example, where the employee is dismissed for filing a serious complaint, or the stated ground is a pretext unsupported by the facts. Arbitrary dismissal is the single biggest litigation risk in UAE terminations, because the burden effectively falls on the employer to show the reason was genuine and connected to the work. The practical defence is built long before the letter is written: consistent documentation, warnings where the ground requires them, and a stated reason that the evidence actually supports.

Termination during the probation period is more flexible but still rule-bound. An employer may end employment during probation by giving the employee at least 14 days' written notice. If the employee resigns during probation to leave the UAE, they must give 14 days' notice; if they resign to join another UAE employer, they must give 30 days' notice and the new employer may be liable to compensate the original employer for recruitment costs. Probation cannot exceed six months, and it cannot be extended — once it lapses, the employee is confirmed and full termination rules apply.

Termination does not end the employer's obligations at the last working day. The employer must pay the full and final settlement within 14 days, issue a service (experience) certificate free of charge on request, cancel the employee's work permit and residence visa through MOHRE and the GDRFA within the required timeframe, and settle any WPS obligations for the final period. Failure to cancel the visa promptly can leave the employee unable to take up new employment and can generate fines, so the offboarding checklist should treat visa cancellation and the final settlement as urgent, parallel tasks.