Either party can singly terminate a limited contract provided he complies with the legal consequences of early termination. In case of unlimited contracts, an employment relation is terminated if both the employer and employee mutually agree to terminate the contract, or when either party decides to terminate the contract provided that the terminating party abides by the legal notice requirements and continues to honour his obligations.
In certain situations, an employer or an employee can terminate an employment contract without notice. Arbitrary dismissal takes place when an employer terminates an employee or forces him to resign without any justifiable reasons.
A limited contract cannot exceed two years' term and it must mention the notice period ranging from a minimum of one month to a maximum of three months.
Either party can singly terminate the original contract or a renewed contract provided he complies with the legal consequences of early termination which include:
Basis for termination
A limited contract can be terminated on the following bases:
In case of unlimited contracts, an employment relation is terminated in one of the following instances:
An employment contract, whether limited or unlimited can be terminated without notice period by either party in accordance of the UAE Labour Law.
Termination of contract without notice by the employer
An employer can terminate an employment contract without notice and deprive the employee of his end of service gratuity, if the latter:
Termination of contract without notice by the employee
An employee can terminate an employment contract without notice period if:
Arbitrary or unfair dismissal takes place when an employer terminates an employee or forces him to resign without any justifiable reasons.
According to Article 122 of the UAE Labour Law, arbitrary termination of an employee happens when an employee is fired for reasons not related to work performance, or when the employee files a valid complaint against an employer, which made the latter terminate him maliciously.
Article 120 of the UAE Labour lays out the reasons for which termination without notice is lawful.
If an employee believes that he has been dismissed illegally, he can complain to Ministry of Human Resources and Emiratisation. The ministry will try to solve the issue amicably. If an amicable settlement is not reached, the case will be referred to the respective court.
As per Article 123 of the UAE Labour Law, if arbitrary dismissal is proven, the court will order the employer to pay a compensation to the employee. The court will assess the value of compensation taking into account the type of work, the extent of damage incurred to the employee and the duration of the employment. In all cases, the amount of compensation must not exceed the wage of the employee for a period of three months, calculated on the basis of the last wage the worker is entitled to.
In addition to compensation, the employee can claim his gratuity, notice period dues or any other unpaid dues he is entitled to from his employer.
After termination of employment contract and cancellation of work visa, the terminated employee is granted a 30-day grace period from the date of cancellation, where he can either obtain a new residence permit or leave the country. Illegal residents are liable to be fined/deported.
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