Article 120 UAE Labour Law is one of the most important laws to understand when terminating an employee without notice. So, you’ll need to ensure that you follow the law’s guidelines exactly. If you plan to terminate an employee without giving them any prior notice.
Failure to do so may result in your business being legally responsible for certain costs related to the termination of employment. Even if your decision was justified by extraordinary circumstances or issues beyond your control.
Learn more about this law and how it works below.
Situation#1: Article 120 UAE Labour Law Says Employer May Terminate an Employee’s Contract without Notice
Article 120 UAE Labour Law says that if an employee violates their contract for an unlawful reason. Or for any other cause that does not involve a minor breach of contract. The employer may terminate the employment without notice.
Article 44 of the UAE Labour LAW states that an employer should discuss with his lawyer. What is considered a minor breach of contract before taking action against an employee.
According to Article 120 UAE Labour Law allows an employer to terminate an employment contract by giving no prior notice in exceptional circumstances and under one of these conditions:
- Adopts a false identity or presents forged credentials.
- Commits a mistake that results in a significant financial loss for the employer. Or if he knowingly causes damage to the employer’s property.
*Keep in mind that the employer must notify MoHRE of the incident within seven working days of becoming aware of it.
- Violates worker and workplace safety rules, provided these rules were verbally explained to an illiterate employee or displayed in writing at conspicuous locations.
- The employee refuses to carry out these obligations despite receiving two warnings that he would be fired if he continued to breach his essential obligations under the employment contract.
- Is discovered to be intoxicated or under the influence of illegal substances while at work or engages in behavior that violates workplace ethics.
- Attacks his employer, his manager, or any of his co-workers while at work.
- Absents himself from work without a valid justification for more than 20 intermittent days or more than 7 days in a row in a year.
- Uses his position for personal gain and illegally takes advantage of it.
- Joins another organization without adhering to the relevant policies and procedures.
The legislation states that the worker may only be fired without cause following a formal investigation by the employer. The written notice of termination must be supported by reasons and given to the employee promptly.
The Severance Pay an Employer Must Give to An Employee Who Is Terminated Without Notice
If an employer terminates an employee’s employment without notice, the employer must pay the employee their severance per the law.
Severance is calculated based on a week’s work for each year of employment or part thereof. It is calculated at half a week for each month of employment or part thereof up to 6 months. And one week for each month of employment or part thereof over 6 months.
Pay immediately, which must be at least one month’s wages. Plus, the employee would have received benefits if they had worked their last day.
Situation#2: Article 120 UAE Labour Law Says Employer May Terminate an Employee’s Contract with Notice
The employer can terminate an employee’s contract with notice According to Article 42 of the “UAE Labour Law,” Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations in the Private Sector: in the following circumstances:
- If the contract is for some time, the employer has no obligation to renew it.
- In cases where one party terminates the contract, this should be done in writing and include a reason or cause.
- If any party decides to terminate it, provided that the terminating party complies with the employment contract’s termination conditions and the stipulated notice time.
- If the contract’s focus is connected to the employer’s entity, it passes away.
- Suppose the worker passes away or becomes totally and permanently unable to work as determined by a certificate issued by a medical organization.
- If the laws in the UAE permanently shut down establishments.
- If the employee, for whatever reason beyond the employer’s control, cannot be of the, is unable to satisfy the requirements for renewing the work permit.
- The employer might not terminate an employee’s contract if they committed a criminal offense while working or were sentenced to life imprisonment.
- The employer shall pay compensation for terminating the employment contract before its end date, calculated as follows:
- 20 days’ wages per year of service, or
- If service were less than one year, it would be calculated payment at 5 days’ wages per month.
- If the employer dismisses employees without prior notice, the employer should compensate to dismissed employees.
Length Of the Termination Notice
According to Article 43, the employment contract may be terminated by either party for any “legitimate reason,” provided that:
- Written notice is sent to the other party,
- A 30- to the 3-month notice of termination is given by the party terminating the agreement.
Be aware that the notice period may be shortened or waived with both parties’ consent and without violating either party’s rights. Legal Translation Dubai has established relationships with law firms that provide legal services. Such as providing contracts and labour consultations so that you are up-to-date on the latest labour law changes.