Tim Elliott
Welcome to Lawgical, the UAE’s first and still the only legal podcast—at least as far as we know. My name’s Tim Elliott. Lawgical comes to you from the Dubai-based legal firm HPL Yamalova & Plewka. And as always, here’s the managing partner, Ludmila Yamalova.
Ludmila Yamalova
Good to see you.
Tim Elliott
Good to see you too, Ludmila. This time, it’s a very special edition of Lawgical. Recently, we took a quick look at the new UAE employment law, but today, I want to get into detail because there’s a lot to discuss. Let’s move on to Part 6—termination of employment relationships under the new law and end-of-employment entitlements. Let’s start with termination by a company.
Ludmila Yamalova
Yes. The general premise here, which is unchanged, is that employment in the UAE is always at-will. This means that either party—the employer or the employee—can terminate the employment relationship at any time for any reason. It’s simply a matter of compensation. Neither party can be forced to continue the relationship against their will.
In terms of termination by a company, the distinctions lie in whether the termination is with or without cause. If the termination is for cause, as outlined in Article 44 of the new law (formerly Article 120), the employer must provide documentation and requisite notices. Grounds for termination for cause include:
- False identity or forged documents
- Significant material loss to the company
- Legal violations
- Failure to perform duties despite warnings
- Substance abuse during working hours
- Acts against workplace morals, such as verbal or physical assault
- Absence without valid reason for more than 20 days in a year or seven consecutive days
- Abuse of position for personal gain
- Working for another company in violation of applicable regulations
While the grounds remain largely the same, the consequences have changed. In the past, termination for cause under Article 120 meant employees lost all end-of-service entitlements. Now, even if terminated for cause, employees retain their end-of-service benefits, though they may lose notice period compensation.
Tim Elliott
What happens if an employee resigns, or if they are responsible for their own termination?
Ludmila Yamalova
There are a few scenarios here:
- Resignation with Notice: Employees must provide notice—typically between 30 and 90 days. The notice period is now capped at 90 days, even if longer periods were contractually agreed in the past.
- Resignation Without Notice (for Cause): Employees can resign without notice under Article 45 if they experience:
- Harassment or violence at work
- Threats to their health or safety
- Being required to perform substantially different work without written agreement
In these cases, employees must report the issue to authorities (e.g., the Ministry of Human Resources and Emiratisation) within a specific timeframe to ensure they retain their entitlements.
- End-of-Service Benefits: Under the new law, end-of-service benefits are the same for resignations and terminations. This includes 21 days of basic salary for each of the first five years and 30 days of basic salary for each year thereafter. These benefits must now be paid within 14 days of the contract’s end.
Tim Elliott
What about part-time employees?
Ludmila Yamalova
This is a major update. Previously, part-time employees weren’t entitled to end-of-service benefits. Now, all employees—whether full-time, part-time, or project-based—are entitled to these benefits, proportional to their time with the company.
For instance, a part-time employee working half the hours of a full-time employee will receive half the end-of-service benefits. This aligns entitlements more equitably across all employment types.
Tim Elliott
What happens if an employee passes away while employed?
Ludmila Yamalova
The new law includes a significant provision for such cases. Employees can nominate a beneficiary to receive their end-of-service benefits in the event of their death. This nomination must be shared with the employer.
If an employee passes away without nominating a beneficiary, the employer must pay the entitlements within 10 days to the next of kin or as directed by local laws. This avoids lengthy court processes and ensures that families receive the financial support they are entitled to without unnecessary delays.
Tim Elliott
That’s Part 6 of our series on the UAE’s new employment law—termination and end-of-employment entitlements. Ludmila Yamalova, managing partner here at Yamalova & Plewka, as always, thank you for your insights.
Ludmila Yamalova
Thank you, Tim. It’s always a pleasure to discuss these important updates with you.
Tim Elliott
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