Country Guides

End of Employment in the UAE

Employment in the UAE cannot be ended “at-will.” Termination must follow statutory labour law and be based on a valid reason, mutual agreement, or the expiry of a fixed-term contract. Employers must provide written notice, final payment, and any end-of-service benefits due.

Termination must be for valid reasons and comply with the employment contract terms, notice periods, and UAE labour laws.

This includes:

  • Written notice is required (14 days during probation, 30–90 days after probation, depending on contract terms).
  • Dismissal must comply with statutory rules and contractual conditions.
  • Employers must document the grounds for termination to avoid disputes.

During probation, no warning letter is required. A termination letter based on the company’s reasons (e.g. poor performance, punctuality, etc.) is issued, and a 14-day notice period will apply.

After probation is completed, multiple warning letters with reasoning are required. Once termination is determined, a termination letter is issued and 30–90 days notice period applies.

Final payment

At the time of termination, employers must settle all outstanding dues, including:

  • Unpaid wages and accrued leave
  • Gratuity (end-of-service benefit) if the employee has served at least 1 year
  • Repatriation costs, unless the employee transfers to another employer
  • Any other entitlements set out in the contract or required under labour law

Cause of termination

Valid grounds for termination under UAE law include:

  • Redundancy or restructuring
  • Poor performance (with documented evidence)
  • Misconduct or breach of contract

Dismissals are considered unfair if they are discriminatory, retaliatory, or related to maternity leave, sick leave, or the exercise of workplace rights.

If dismissal is declared unfair, employees may be entitled to compensation of up to 3 months’ wages, in addition to standard end-of-service benefits.

Repercussions for breach

Employers who do not follow proper termination procedures risk:

  • Compensation awards for employees (up to 3 months’ wages)
  • Liability for unpaid entitlements, including gratuity and repatriation
  • Court disputes and reputational damage

Severance pay

Employees with at least one year of continuous service are entitled to end-of-service gratuity. This is calculated as 21 days of basic salary per year for the first 5 years, and 30 days per year thereafter, subject to statutory limits.

Notice periods

Unless mutually agreed otherwise or termination is a result of gross misconduct, a 14-day notice must be provided during probation and 30–90 days after probation.

Contractors vs employees

Independent contractors are not covered by labour law benefits such as gratuity, leave, or repatriation. Misclassification risks back pay, penalties, and legal claims.

Fixed-term contracts

Employment contracts in the UAE are fixed-term (up to 3 years) but can be renewed. Early termination without cause may require compensation equivalent to the shorter of 3 months’ wages or the remainder of the contract.

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