Host
There’s just so much more to hear. Download our podcast at DubaiEye1038.com. Our guest today is Ali Al-Assad from Yamalova & Plewka. Ali, thank you very much for joining us.
Ali
Thank you for having me again.
Host
Looking very dapper on the red carpet this evening, but still here to talk business. Ready for it?
Ali
Ready as always.
Host
Good. Well, if we can, Ali, our topic today is all about terminating employment contracts. It’s something many people experience, whether they wanted to terminate the contract or their employer did. Let’s dive into both sides of that.
Host
So, if anyone has questions about employment contracts, text us at 4001 or use the free messaging app. Ali is primed and ready. And it doesn’t just have to be about employment—you can text in with any other legal questions. Ali, we already have some questions coming in for you. Here’s one:
Question
“My landlord cannot increase the rent as I’m below the RERA index. However, he just informed me that he will no longer pay the annual capacity charge, which was part of the annual rent for the last four years. Essentially, this is an indirect rent increase. Is this legal?”
Ali
Straightforward answer: It is not legal. The capacity payment is part of the agreed terms of the tenancy contract. A landlord has no right to unilaterally amend the terms without mutual agreement.
In general, if any party wishes to make amendments to a contract, such changes must be communicated at least 90 days prior to the expiry of the tenancy agreement. If no agreement is reached, the matter can be referred to the Rental Dispute Centre (RDC). In this case, the landlord’s action violates the law, and you have the right to challenge it.
Host
So the advice here is to challenge it. Ideally, resolve it amicably, but if necessary, you can escalate it to the RDC.
Ali
Exactly. We always recommend attempting to resolve disputes amicably before filing a formal case. At the RDC, there is also a mediation stage before the matter proceeds to litigation.
Host
Is this something you encounter often—landlords trying to bend the rules?
Ali
Yes, we’ve seen similar cases. Another common example is landlords trying to charge extra for parking or facility access, which were originally included in the rent. This is another way landlords attempt to indirectly increase the rent.
Host
If we can, Ali, let’s move on to the topic you wanted to address today—terminating employment contracts. It’s something you likely deal with often. What are the different reasons for termination, both from the employer’s and employee’s perspectives?
Ali
Termination can happen from either side.
From the employee’s side, the law doesn’t specify conditions for resignation. Employees can resign for any reason as long as they serve the required notice period stated in their contract.
From the employer’s side, the situation is more nuanced. Article 120 of the UAE Labor Law outlines specific cases where an employer can terminate an employee without notice or compensation, such as misconduct or breach of contract.
However, employers must provide substantial proof to justify such terminations. Most cases fail due to a lack of evidence, leading employers to wrongly assume they must pay arbitrary dismissal compensation—up to three months’ salary.
It’s also important to note that employers can terminate employees for valid but less severe reasons outside of Article 120. In these cases, they must provide notice and end-of-service benefits, but no arbitrary dismissal compensation is owed.
Host
And what about limited contracts? Are there additional penalties for early termination?
Ali
Yes, under Article 116 of the law, employees who resign before completing a limited contract may be required to compensate the employer with up to 45 days of salary. However, this penalty is subject to court approval. Without a court ruling, employees are not obligated to pay.
Host
If you have questions about employment contracts or other legal issues, text us at 4001 or use the free messaging app. Ali is here to help. Now, Ali, we’ve received several questions about notice periods and limited contracts. Let’s start with this one:
Question
“I signed a contract when joining that stated a one-month notice period. Two years later, upon my visa renewal, my company changed it to three months in the labor card form. Which document takes precedence in this case?”
Ali
In this case, the most recent document typically takes precedence. If the new labor contract reflects a three-month notice period and was signed by you, then the three-month notice is binding.
Host
What if someone wasn’t explicitly notified about the change in terms?
Ali
For employment contracts, terms must be clearly communicated. However, the employee’s signature indicates acceptance, even if the change wasn’t explicitly highlighted. That’s why we always stress the importance of thoroughly reviewing any contract or renewal.
Host
Here’s another question along the same lines:
Question
“My company made blanket amendments to all contracts last year. I’m now on a three-year contract, but because of the change, it’s technically three months short of completion. Will this affect my gratuity because I won’t have completed three full years?”
Ali
No, it won’t. Gratuity is calculated based on your total years of service, not the term of your current contract. If you’ve been employed continuously, your gratuity will cover the entire duration of your service, regardless of the contract length.
Host
Let’s take this next question:
Question
“My company forced me to terminate my contract, and I signed resignation papers. However, I am still working there. How does this affect me?”
Ali
If the resignation was signed under duress, and you continue working after submitting it, this creates a gray area. Courts generally consider whether the employment relationship continued beyond the resignation date. If you’ve been working for several months since signing, this could indicate a renewal of employment.
It’s advisable to document all communication and seek legal advice to clarify your position.
Host
Ali, here’s an interesting one about health insurance:
Question
“Due to the mandatory insurance decree, some companies are deducting the cost of health insurance from employees’ salaries. Is this legal?”
Ali
No, it’s not legal. Employers are responsible for covering the cost of health insurance for their employees. If a company attempts to deduct this cost from your salary without your consent, you have the right to challenge it.
Host
We’ve also received a lot of questions about termination processes. Let’s cover this one:
Question
“Can an employer terminate my contract at any time?”
Ali
Yes, employers can terminate contracts at any time, but it’s a matter of compensation. If the termination is without a valid reason as per Article 120, the employer may need to pay compensation for arbitrary dismissal—up to three months’ salary—as well as any applicable notice and end-of-service benefits.
Host
And what about employees?
Ali
Employees can resign at any time, provided they serve the notice period stipulated in their contract. For limited contracts, early resignation may result in compensation to the employer, capped at 45 days’ salary, but only if damages are proven in court.
Host
Finally, Ali, we’ve received a non-employment-related question:
Question
“My water boiler has been broken for over a week, and my landlord says they’re waiting for approval to fix it. What can I do?”
Ali
You can inform your landlord in writing that you’ll arrange for repairs yourself if the issue isn’t resolved within a reasonable time, such as one week. Keep all receipts for the repair. At the next contract renewal, you can deduct the cost from your rent. If the landlord disputes this, you have the right to take the matter to the Rental Dispute Centre (RDC) for resolution.
Host
Thank you, Ali. As always, you’ve provided clear and helpful insights. For anyone with more questions, text us at 4001 or use the free messaging app. We’ll continue to take your legal queries next week.
