UAE Labour Law Sets Clear Rules for Fairly Ending Employment and Safeguarding Worker Rights

Employment relationships in the United Arab Emirates are governed by Federal Decree-Law No. 33 of 2021 Regulating Labour Relations (“UAE Labour Law”), together with its Executive Regulations under Cabinet Resolution No. 1 of 2022 (“Executive Regulations”). These regulations set out clear rules for how employment may end, the rights owed to employees, and the obligations employers must meet when concluding the contractual relationship. Understanding these provisions ensures both parties remain compliant and protected throughout the process.

Lawful Termination of Employment


The UAE Labour Law under Article 42 outlines several circumstances in which an employment contract may lawfully end. These include expiry of the fixed-term contract, mutual written agreement, or termination initiated by either party with proper notice. Contracts may also end due to death or permanent disability of the employee, closure of the establishment, bankruptcy or insolvency of the employer, or when external economic conditions prevent business continuation.


Article 25 of Executive Regulations further permits the Ministry to cancel work permits in bankruptcy cases and allow employees to transfer to new employers.

Notice Requirements


Under Article 43 (UAE Labour Law), termination by either party requires written notice of 30 to 90 days. The employee continues to work normally during this period and receives full salary. Failure to honour the notice period requires payment of salary in lieu of notice. Employees whose employment is being terminated are also entitled to one unpaid day per week to search for new employment.


During probation, Article 9 (UAE Labour Law) permits termination with 14 days’ notice from the employer or 30 days’ notice from the employee if joining another employer.

Dismissal Without Notice


Article 44 (UAE Labour Law) allows dismissal without notice in cases of serious misconduct such as forged documents, disclosure of confidential information, major negligence causing loss, intoxication, assault, or extended unjustified absence. Such decisions must be documented and follow a fair investigation.

Unlawful Dismissal


Termination is deemed unlawful if it is connected to an employee filing a serious complaint or valid case against the employer. Under Article 47 (UAE Labour Law), courts may award compensation of up to three months’ salary, in addition to all other entitlements.

Garden Leave


Although not expressly named in the legislation, garden leave is derived from Article 43 (UAE Labour Law) concerning paid notice periods. Garden leave refers to directing the employee to stay away from work while still serving the notice period on full pay. Its main purpose is to protect the employer’s business interests -- such as confidential information and client relationships -- while preventing immediate movement to a competitor. During garden leave, the employee remains fully employed, continues to receive salary and benefits, and must comply with confidentiality and contractual obligations. Garden leave cannot extend beyond the agreed notice period.

Resignation and Employee-Initiated Termination


Employees may resign at any time by providing written notice within the contractual notice period. However, Article 45 (UAE Labour Law) allows resignation without notice in specific circumstances. These include the employer’s failure to meet contractual obligations despite Ministry notification, physical assault or harassment by the employer or its representatives, the presence of serious workplace dangers, or assigning work fundamentally different from what was agreed without written consent.

Article 26 (Executive Regulations) outlines examples of serious dangers, including hazardous chemicals, exposure to electrical risks, extreme temperatures, radiation, biological threats, and other conditions that present a risk to health or safety.

Where an employee leaves work without legal justification before the contract term expires, Article 50 (UAE Labour Law) authorises the Ministry to impose a one-year work permit ban. Absence of more than seven consecutive days without justification may be reported under Article 28 (Executive Regulations). Certain categories, such as Golden Visa holders, workers sponsored by parents, and highly skilled individuals, may receive exemptions.

If an employer prevents an employee from performing duties without valid justification, Article 17 (Executive Regulations) requires continued wage payment. Employees may notify the employer, file a complaint, and request a transfer to another establishment if the employer does not resolve the issue.

End-of-Service Benefits


For full-time foreign employees completing at least one year of continuous service, Article 51 (UAE Labour Law) provides end-of-service gratuity calculated on basic salary: 21 days per year for the first five years and 30 days per year thereafter. Fractional years are calculated proportionally, and unpaid absence is excluded. Gratuity is capped at two years’ total salary.

Part-time and job-share workers are also entitled to gratuity on a proportional basis under Article 30 (Executive Regulations). Temporary employment lasting under one year does not qualify.
Lawful deductions may be applied to gratuity, such as outstanding loans, disciplinary penalties, pension contributions, or sums owed under court judgments, in accordance with Article 51(7) (UAE Labour Law) and Article 29 (Executive Regulations).

Under Article 53 (UAE Labour Law), all final dues, including salary, leave encashment, and gratuity must be paid within 14 days of termination. In the event of death, Article 15 (UAE Labour Law) requires employers to pay all dues to the family within 10 days and cover repatriation costs if requested.

Conclusion


The UAE Labour Law and its Executive Regulations provide a structured and balanced framework for ending employment relationships. By clearly defining lawful grounds for termination, protecting employees from unfair treatment, and ensuring timely settlement of financial rights, the legislation supports both business stability and employee welfare. Garden leave, notice rules, and end-of-service benefits collectively ensure that employment transitions occur with transparency, fairness, and legal certainty. Both employers and employees benefit significantly from understanding and applying these provisions correctly.

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