Termination of Employment in the UAE: Complete Legal Guide (2026)

Employment termination in the UAE is governed by Federal Decree-Law No. 33 of 2021 — a comprehensive statute that sets out lawful grounds, mandatory notice periods, gratuity entitlements, and the consequences of getting any of these wrong. This guide covers the full framework for both employers and employees, with specific article references throughout.

Legal notice: This article is general information only and does not constitute legal advice. Consult a UAE-licensed lawyer for advice on your specific situation.

The Legal Framework

Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations replaced Federal Law No. 8 of 1980 in full, effective 2 February 2022. The old labour law and all its provisions — including Article 120 of the repealed 1980 law — no longer apply. All references to employment termination should be read against the current 2021 statute.

Lawful Grounds for Termination

Article 42 of Federal Decree-Law No. 33 of 2021 sets out the lawful grounds under which an employment contract may be terminated:

1. Expiration of the contract: a fixed-term contract ends automatically at its expiry date unless both parties agree to extend it.
2. Mutual agreement: both parties may agree to terminate, provided the agreement is in writing and covers the notice period and settlement.
3. Employee's death or total incapacity: the contract ends automatically. A medical certificate confirming total incapacity is required. If an employee is partially incapacitated but can work in another capacity, the employer must reassign them where a suitable position exists.
4. Employer's death: if the contract is intrinsically linked to the employer personally, it ends with their death. If the business continues independently, contracts continue unless specific clauses provide otherwise.
5. Court ruling: termination is lawful if a court decision prevents the employee from fulfilling their role within a three-month period.
6. Business closure or bankruptcy: permanent closure of the business or financial insolvency may end all related contracts, subject to notice and settlement obligations.
7. Genuine economic or structural reasons: the law permits termination for legitimate economic challenges or restructuring, provided the employer follows the correct legal procedures and can demonstrate genuine business necessity.

Notice Period Requirements

Article 43 requires written notice for termination. The standard notice period is between 30 and 90 days, as agreed between the parties. Key rules:

• Written notice required: verbal notice is insufficient — the notice must be in writing.
• Full wages during notice: employees must receive their full contractual wage throughout the notice period, including if placed on garden leave.
• Job search leave: employees dismissed by the employer are entitled to one paid day per week to search for a new job during the notice period.
• Uncompleted notice: if an employee fails to complete their notice period, the employer may deduct the equivalent notice pay from the final settlement.

Probation Periods

The maximum probation period is six months under Federal Decree-Law No. 33 of 2021, Article 9. During probation, the statutory minimum notice for either party wishing to terminate is 14 days (Article 42(3)). Contracts may specify a longer notice period, but cannot shorten the 14-day statutory minimum.

Employees on probation are not entitled to end-of-service gratuity. If an employer terminates an employee after probation has ended, the full notice and gratuity framework applies. An employee cannot be placed on probation more than once with the same employer in the same role.

Summary Dismissal by Employer Without Notice (Article 44)

An employer may terminate without notice only on the grounds specifically listed in Article 44 of Federal Decree-Law No. 33 of 2021. These grounds are exhaustive — termination without notice for any reason not listed here is unlawful:

1. Fraudulent documents: the employee submitted forged or fraudulent identity or qualification documents.
2. Breach of confidentiality: the employee disclosed confidential company information causing loss.
3. Repeated neglect after warnings: the employee repeatedly failed to perform contractual duties after receiving written warnings.
4. Safety violations: the employee committed acts that endangered workplace safety or the safety of others.
5. Trade secret disclosure: the employee disclosed trade secrets for personal gain or otherwise in breach of their obligations.

Summary dismissal on Article 44 grounds may result in forfeiture of end-of-service gratuity in addition to the loss of notice pay. The employer bears the burden of proving the ground existed.

Employee-Initiated Termination Without Notice (Article 45)

Under Article 45, an employee may terminate without serving the standard notice period in two specific circumstances:

• Employer breach of legal obligations: the employee may leave without notice if the employer fails to fulfil their legal obligations under the employment contract or UAE labour law. The employee must notify MoHRE at least 14 working days before leaving.
• Workplace harassment: if the employee experiences harassment or assault by the employer or a colleague with the employer's knowledge, the employee may leave without notice. MoHRE must be notified within five working days.

In both cases, the employee retains their gratuity and notice pay entitlements.

Arbitrary Termination

Arbitrary termination occurs when an employer ends a contract for reasons unrelated to the employee's job performance or conduct — for example, due to personal conflicts, discrimination based on race, gender, religion, or nationality, or other non-performance-related grounds.

Where a court finds termination was arbitrary, the employer may be required to:

• Pay compensation of up to three months' wages (this is separate from, and in addition to, gratuity, notice pay, and unused leave entitlements)
• Reinstate the employee, particularly if the dismissal was grossly unjust and the employee requests it

End-of-Service Gratuity

End-of-service gratuity is payable to employees who have completed at least one full year of continuous service. No gratuity is payable where the employee has served less than one year.

Calculation

• Years 1–5: 21 days of basic wage for each completed year of service.
• Years beyond 5: 30 days of basic wage for each additional year beyond the first five.
• Cap: total gratuity cannot exceed two years' worth of wages.

Gratuity forfeiture

An employee terminated under Article 44 (summary dismissal for serious misconduct) may forfeit their right to end-of-service gratuity. The employer must prove the Article 44 ground existed. Where termination is for any other reason, gratuity cannot be withheld.

Medical Leave and Health-Related Termination

Employers cannot terminate an employee who is on sick leave until the statutory sick leave entitlement is exhausted. Employees are entitled to up to 90 days of sick leave annually: the first 15 days are fully paid, the next 30 days are half-paid, and the final 45 days are unpaid. Termination of an employee during the fully or half-paid sick leave period is unlawful.

Non-Competition Clauses

Non-competition clauses in UAE employment contracts are enforceable where they are reasonable in duration, geographic scope, and the type of activity restricted. Courts generally uphold clauses limited to six months to one year and confined to the relevant industry or region. An excessively broad or indefinite clause may be invalidated or reduced by a court. Under Federal Decree-Law No. 33 of 2021, employees who breach a valid non-competition clause may be liable for damages.

Employee Benefits on Termination

• End-of-service gratuity: payable where one full year of service has been completed, as calculated above.
• Unused leave entitlement: compensation for any accrued but unused annual leave must be included in the final settlement, calculated on the basis of daily wage.
• Notice pay: where the employer waives the notice period rather than requiring the employee to work it, the equivalent wage for the notice period must still be paid.

How to File a MoHRE Complaint for Wrongful Termination

Employees who believe they were wrongfully terminated can file a complaint with the Ministry of Human Resources and Emiratisation through three channels:

• Online: at mohre.gov.ae using your Emirates ID to create an account.
• Mobile app: the MoHRE app (available on iOS and Android).
• In person: at any MoHRE service centre with your Emirates ID, employment contract, and termination documentation.

MoHRE will investigate and attempt mediation. If mediation fails, the case is referred to the Labour Court, where both parties present evidence and a judge issues a final ruling. Employees can claim compensation for wrongful termination, unpaid wages, gratuity, and unused leave. If a police case or court case has been filed in connection with the termination, you can check your UAE court and police case status online. If a travel ban has been imposed, see our guide on how to check a UAE travel ban.

Frequently Asked Questions

What is the notice period for termination in the UAE? 30 to 90 days in writing, based on mutual agreement, under Article 43. During probation, the statutory minimum is 14 days for either party.

Can an employer terminate without notice? Only on the grounds listed in Article 44: fraudulent documents, breach of confidentiality, repeated neglect after warnings, safety violations, or trade secret disclosure. These grounds are exhaustive.

How is end-of-service gratuity calculated? 21 days basic wage per year for years 1-5, then 30 days per year thereafter, capped at two years total wages. Requires at least one full year of service.

What is the compensation for arbitrary dismissal? Up to three months wages, separate from gratuity and notice pay. A court must find the termination was arbitrary.

Can an employee resign without notice? Yes, under Article 45: where the employer breaches legal obligations (with 14 working days MoHRE notification) or where the employee faces harassment (with 5-day MoHRE notification). Full entitlements are preserved in both cases.

Is gratuity paid if an employee is fired for misconduct? Not necessarily. Summary dismissal under Article 44 may result in forfeiture of gratuity. The employer bears the burden of proving the ground existed.

Can I be terminated during sick leave? Not during the first 45 days of sick leave (15 fully paid plus 30 half-paid). Once the sick leave entitlement is exhausted, termination becomes possible subject to the usual rules.

Does the old Article 120 of the 1980 Labour Law still apply? No. Federal Law No. 8 of 1980 was repealed in full by Federal Decree-Law No. 33 of 2021, effective 2 February 2022. Article 44 of the current law now governs summary dismissal grounds.

Key Takeaways

• The repealed 1980 Labour Law no longer applies — all termination matters are governed by Federal Decree-Law No. 33 of 2021.
• Standard notice period: 30–90 days in writing. Probation statutory minimum: 14 days.
• Article 44 grounds for summary dismissal are exhaustive — any other reason requires notice.
• Gratuity requires one full year of service: 21 days per year for years 1–5, 30 days per year thereafter, capped at two years wages.
• Arbitrary termination compensation is up to three months wages, separate from all other entitlements.
• MoHRE complaints can be filed online, via app, or in person. Unresolved cases go to the Labour Court.

References

1. Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (Articles 9, 42–45, 47, 51) — UAE Legislation Portal
2. Ministry of Human Resources and Emiratisation — mohre.gov.ae
3. UAE Government Portal — Labour rights and termination