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In which instances can an employment contract be terminated in the UAE? The Ministry of Human Resources and Emiratisation has identified nine situations where this is legal. According to the UAE Labour Law under the Federal Decree Law, an employment contract may be terminated under these circumstances: 1. If the term of the employment contract expires and is not extended or renewed. 2. If both the employer and employee mutually agree in writing to end the contract. 3. If either party wishes to end the employment contract, provided that the terminating party observes the provisions of the termination of employment contract and agree on the notice period. 4. If the establishment is permanently closed, in accordance with legislations. 5. In the event of the employer’s death, if the subject of the contract is related to its entity. 6. In the event of the worker’s death or full permanent inability to work, based on a certificate issued by a medical entity. 7. If a worker faces final court judgement of a jail term, detention or a freedom-restricting penalty for a period of not less than three months. 8. If the employer becomes bankrupt or insolvent, or faces any economic or exceptional reasons that will prevent the continuation of the project. 9. If the worker fails to fulfil the conditions for renewing the work permit for any reason beyond the employer’s control. The following provisions must also be met: The terminating party must serve a notice of 1 month (30 days) to 3 months (90 days) and work as agreed upon in the contract must be performed during the notice period. The notice period may be reduced or exempted on mutual agreement between the employee and employer. The party who fails to serve the notice period must pay a “notice period” allowance, equivalent to the worker’s wage for the full notice period or in proportion to the remaining period. The allowance for the notice period is calculated according to the last wage received by the worker. During the notice period, the employee is entitled to his full wage as stated in the employment contract. ICA/Expat Media
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