Wrongful Termination in the UAE

In the UAE, "wrongful termination" no longer exists as a standalone legal claim, even though the phrase still comes up constantly in workplace conversations. UAE law does not punish an employer for firing an employee without justification, and it does not punish an employee for resigning without one either.

Termination and resignation are treated as equal, permissible ways to end employment, and neither is considered wrongful or penalized. In practice, UAE employment law now works on the principle of employment at will.

Employment at will: the UAE model

Under the UAE's current Employment Law (Federal Decree-Law No. 33 of 2021), either party to the employment relationship can end it at any time, for any reason. Employers can terminate an employee with or without cause. Employees can resign at any time, with or without justification. Neither side has to explain, justify, or defend the reason. The only requirement is payment of what is due.

This puts the UAE closer to jurisdictions like the United States, where employment at will is the default. Even so, the UAE still gives workers more protection than the US does, mainly through mandatory notice periods and end-of-service benefits.

Verbal termination is generally not enough

Either party may end the employment relationship at any time, but the UAE Employment Law still sets rules for how that termination happens. Under Article 43 of Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, notice of termination must be given in writing. A purely verbal dismissal, on its own, generally does not meet this requirement.

In practice, the burden of proving that employment has ended falls on the employer, because the employer has to establish the employee's last day of work. Notice pay, end-of-service benefits, and other statutory entitlements are all calculated from that date. Without written evidence, an employee may argue the employment relationship is still active.

A verbal termination can still become legally significant if it is later confirmed in writing by either party and backed up by how both sides behave afterward. If an employee confirms a verbal termination in writing and both parties then act consistently with that understanding, a court may treat the termination as effective based on that evidence.

If an employer refuses to confirm a verbal dismissal in writing, employees should keep a written record of the communications and, where appropriate, promptly file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).

Termination without cause: not illegal, but compensable

UAE law does not stop employers from terminating an employee without cause. The focus is entirely on compensation. Regardless of the reason employment ends, employees are entitled to specific financial payments, including:

• Minimum one-month notice period (unless the contract specifies a longer period)
• Unpaid salary, commissions, or bonuses
• Accrued but unused annual leave
• End-of-service gratuity: 21 days of basic salary per year of service for the first 5 years, and 30 days of basic salary per year of service after that
• One-way repatriation ticket, if applicable

There is no automatic extra compensation just because the dismissal was abrupt or the employer gave no stated cause.

Retaliatory dismissals: the one exception

There is a narrow exception under Article 47 of the UAE Employment Law. If an employee is terminated for filing a serious complaint or legal claim against the employer, and the dismissal is found to be retaliatory, the employee may be entitled to additional remedies. This is the only case where UAE law looks at the motive behind a termination and allows recourse beyond the standard statutory dues.

How things used to be: penalties under the old law

Before the 2021 amendment, UAE employment law penalized both sides under certain conditions. Employers could be liable for arbitrary dismissal and had to pay up to three months' salary for terminating without cause. Employees could be penalized for resigning early, especially during a fixed-term contract, through reduced or lost end-of-service benefits and compensation to the employer equal to 1.5 times their monthly salary. Employees terminated for cause could also lose their end-of-service gratuity altogether.

The new law removed all of these punitive elements.

Equal footing: the modern approach

The 2021 reform built a more balanced system. Employers face no penalty for terminating, as long as they pay compensation. Employees face no penalty for resigning, as long as they give notice. It is a clean break: employment ends when one party decides, and the only remaining question is the compensation owed.

A word on international comparisons

Unlike many European jurisdictions, UAE employers do not need government approval to justify a termination. There are no tribunals requiring approval or reinstatement, and no legal grace period during which a dismissed employee keeps receiving full salary until the termination is finalized. By contrast, employers in many European countries must provide cause for termination, follow strict procedures, and in some cases wait for labor court approval. None of that red tape exists in the UAE.

Know your rights and responsibilities

The UAE runs on a form of employment at will: both employers and employees can end the relationship at any time, for any reason, with no legal penalty attached. The only consequence is compensation, and the law defines it precisely; the old penalties for early resignation and arbitrary dismissal no longer apply. Whether someone is negotiating a contract, planning a career move, or preparing for a separation, knowing these rules is what turns a costly guess into an informed decision.

How LYLAW can assist

Whether you are an employer managing a termination or an employee facing one, obtaining legal advice early can help avoid unnecessary disputes and protect your legal rights. At LYLAW, we regularly advise clients on all aspects of employment termination in the UAE, including:

• Reviewing the legality and procedure of a termination or resignation;
• Advising on notice periods, end-of-service gratuity, commissions, and other employment entitlements;
• Advising employers on compliant termination procedures and reducing the risk of employment claims; and
• Negotiating employment settlements and separation agreements.

Our team has extensive experience representing both employers and employees across a wide range of UAE employment matters. Whether you are seeking to protect your rights, resolve a dispute, or ensure compliance with UAE employment law, we can provide strategic legal advice tailored to your circumstances.