Can I Resign in Limited Contract in the UAE- Labor Laws2024

Introduction:

Are you an expat working in UAE or planning to start your job there on a limited contract? But you are unsure about the labor laws and have multiple questions in your mind? Then don’t worry, we have got you covered. In this read, all your queries regarding limited contract such as whether you can resign from a limited contract will be answered and many more. So, keep reading!

Before we delve into the details, first let’s understand the types of employment contracts in UAE under the labor law.

Employment Contracts in UAE:

In the United Arab Emirates (UAE), employment contracts can generally be categorized into two types.

  1. Open-ended or Unlimited term Contract
  2. Limited term  or Fixed term Contract

Open-ended/ Unlimited term Contract:

In the UAE, an open-ended or unlimited term contract is an employment contract where no period has been specified whereby the contract is effective until terminated by proper process. Such a contract remains in existence until it is brought to an end by the agreement of the parties of the contract or by the legal dissolution of the contract through dismissal procedure. It means a valid reason has to be provided by either the employer or the employee in such a case.

Limited term Contract:

In the UAE, a limited contract or a fixed-term contract refers to a legal employment agreement that has legal boundaries within the specified time. The duration of a limited contract can range between one to three years.

It clearly mentions the start and end date of the contract and it is also linked with your limit of residence permit in the country.  So, the contract automatically ends on the completion of the specified period.  However, if the employer wants to extend the contract, then it can be renewed with the mutual agreement of both, employer and the employee.

Besides the above information a limited term contract also include the kind of work, the workplace and the amount of salary.

Can I resign in a limited Contract?

For Government Employees:

If you want to resign in a limited contract from a government organization then you need to submit a written letter explaining the reason of resignation. The administration can take up to one month to respond to your letter. Moreover, if they do not respond then you need to continue working. And if they accept the resignation, then next two months you will work and also return all the work related things during this time.

It is always advised to seek professional help or consult law i.e. Article 80-81 to better understand your rights and obligations  

For Private Sector Employees:

Federal Decree No. 33 of 2021 governs the process of resignation for the employees working on a limited contract in the private sector. Although the end date is mentioned on the contract already but it is necessary for the employee to submit a 30 day notice period in the company. During this time, the contract remains active. Moreover, during notice period, you are expected to fulfill your job responsibilities properly and eligible to get your salary the same way.

The employer cannot delay accepting your resignation due to any unreasonable fact such as workload issues etc.

Can I resign before the limited term contract ends?

Are you are wondering if you can resign before the limited contract ends then the answer is simple Yes! But you need to follow some rules to execute the process seamlessly.

Legal Process of Early Resignation involves the following steps:

  1. A written formal resignation stating 30- day notice period (may vary in different job positions)
  2. Review your contract for any termination fee
  3. Fulfill your duties and return work related belongings
  4. Check local regulations or seek professional help to avoid any mishap or work ban

Notice period:

A 30- day notice period application is mandatory to submit if you want to resign before the actual contract ending date.

Termination Fee:

Then, check carefully if you there is any termination fee mentioned in the contract that you will have to pay in case of early termination from your end.

Despite the fact, you will be eligible to get the salary during the notice period but still you will have to pay the termination fee written in the contract.

Work Ban:

If you are working in private sector and planning to resign before the contract ends, then be careful you may not be able to get any other job in the country as you will be banned to work in the UAE. Therefore, it is always a good idea to seek legal help in such scenarios to avoid any complications and inconvenience.

Penalties:

The contract terms must be abided by both the parties. If any of the parties breaches the contract terms, will face penalties. The specifics of these penalties are typically outlined in the employment contract itself and are in accordance with UAE labor laws.

End-of-Service Gratuity:

Gratuity is the amount that an employee claims when he completes his/her service. Employees on a limited contract are entitled to end-of-service gratuity if they complete at least one year of continuous service. The gratuity is calculated based on the employee’s last drawn salary and length of service.

Legal Framework:

Limited contracts in the UAE are governed by the UAE Labor Law. It sets out the rights and obligations of both employers and employees. Any disputes arising from limited contracts can be taken to the Ministry of Human Resources and Emiratisation (MOHRE) for resolution.

Rights and Obligations of Employees under Limited term Contract in the UAE:

Before you start a job under limited contract in the UAE, you must understand your rights and obligations to avail benefits at its full and to avoid any legal issues.

Rights of an Employee:

  • According to the article 28, you are entitled to avail paid off on public holidays. In case, if employer asks you to work on public holiday, the employer must pay full wage of a day.
  • As per article 53, an employee must receive all payments and wages mentioned in the contract within 14 days after the end of the contract term.
  • Moreover, an employee should get full paid annual leaves or any other leaves left from the previous year.
  • Maternity leaves should be given to the women employees
  • End of year benefits

Obligations of an Employee:

  • According to article 17, you must work 8 hours a day or 48 hours in a week.
  • As per article 16, you must do your assigned work and do not outsource it from any third party
  • Article 10 obliges you to respect the confidentiality of any client’s information and do not breach it

Wrapping Up:

Understanding the nuances of limited contracts in the UAE is essential for expats. These contracts, defined by specific terms and durations, require adherence to resignation protocols, notice periods, and possible termination fees. Both government and private sector employees have distinct procedures to follow. Awareness of employee rights, such as paid public holidays and timely wage payments, and obligations like confidentiality and work hours, is crucial. Seeking legal advice when resigning can help ensure compliance with UAE labor laws and protect your employment rights.

FAQs

What happens if an employer terminates a limited contract early?

If an employer terminates the contract early without a valid reason, they may be required to compensate the employee, usually equivalent to the salary for the remaining contract period.

What are the employee’s obligations if they want to resign before the contract ends?

An employee may need to compensate the employer, often by paying a specified amount or forfeiting end-of-service benefits, if they resign before the contract ends.

How is the end-of-service gratuity calculated for a limited contract?

End-of-service gratuity is calculated based on the employee’s last drawn salary and the length of service, provided the employee has completed at least one year of continuous service.

What is the typical notice period for terminating a limited contract?

The notice period is generally stipulated in the contract and typically ranges from 30 to 90 days.

Are there penalties for breaking a limited contract?

Yes, both parties may face penalties for breaching the contract terms, which are usually outlined in the employment contract and in accordance with UAE labor laws.

What legal framework governs limited contracts in the UAE?

Limited contracts are governed by the UAE Labor Law, which outlines the rights and obligations of both employers and employees.

Can an employee switch to a new employer before their limited contract ends?

Yes, but they may need to obtain a No Objection Certificate (NOC) from their current employer and may also be subject to financial penalties.

What are the grounds for terminating a limited contract without penalty?

Valid reasons include gross misconduct, significant breaches of contract terms, or mutual agreement between the employer and employee. Specific conditions are detailed in the UAE Labor Law.

Can i resign within 6 months of probation period of limited term contract?

Yes, you can resign within the 6-month probation period of a limited term contract, but you must give at least 14 days’ notice.

What is work ban in the UAE?

A work ban in the UAE is a restriction placed on an individual, preventing them from working in the country for a specific period. It can be imposed by the Ministry of Human Resources and Emiratisation (MOHRE) for various reasons. Here are key points about work bans.