Can I Resign after 6 Months In Limited Contract UAE: Legally
The recent Labour Law reforms in the United Arab Emirates (UAE) have brought significant changes to the employment landscape, particularly concerning limited contracts. These reforms, overseen by the Ministry of Human Resources and Emiratization, have prompted a significant increase in queries from employees, with one of the frequently asked concerns being: “Can I resign after 6 months in a limited contract in the UAE?”
This guide aims to offer clarity on limited contracts under the new regulations, addressing various concerns and providing actionable insights for both employers and employees. The key concerns to be addressed are as follows:
Understanding When Your Employer Can Terminate Your Contract
Article 120 of the UAE labor law outlines the circumstances under which an employer may dismiss an employee without notice. It’s important to note that Federal Law No. 8 of 1980 amended Article 120, affecting the provisions related to dismissal without notice.
According to UAE labor law Article 120, employers have several grounds upon which they can dismiss an employee without having to adhere to the notice period. Here’s what employers need to know:
False identity or documentation: If an employee adopts a false nationality or identity, or submits false documentation or certificates, the employer may dismiss them without notice.
Probation period: During or upon expiry of the probation period, the employer can dismiss the employee without notice if certain conditions are met.
Material loss due to employee’s mistake: If a significant material loss occurs due to the employee’s mistake or fault, the employer must first notify the Ministry of Labour within 48 hours of becoming aware of the incident before dismissing the employee without notice.
Failure to follow safety instructions: If the employee fails to follow established safety instructions in the workplace or industrial safety regulations, the employer may dismiss them without notice. However, written instructions must be posted in a visible place, or orally communicated to illiterate workers.
Failure to carry out basic tasks: If the employee consistently fails to perform basic tasks and duties outlined in their employment contract, the employer must inform the employee of potential dismissal in writing, subject to a written investigation.
Disclosure of confidential information: If the employee discloses confidential or private information about the establishment where they work, they can be dismissed without notice.
Legal offenses: If the employee is judged or convicted by a competent court for an offense related to public morals, honor, or honesty, the employer may dismiss them without notice.
Intoxication: If the employee is found to be under the influence of alcohol or drugs during working hours, they can be dismissed without notice.
Assault: If the employee assaults a coworker or manager during working hours, the employer may dismiss them without notice.
Excessive absence: If the employee is absent from work for more than 20 days (non-consecutive) or more than 7 consecutive days without providing a valid reason within one year, the employer may dismiss them without notice.
Additionally, Article 88 of the UAE labor law stipulates that an employer has the right to dismiss an employee without notice if they are found working for another employer during their annual leave or sick leave.
If any of the situations mentioned in Article 120 occur, the employer is legally permitted to dismiss the employee without providing notice. However, it’s essential for employers to ensure that they follow the procedures and requirements outlined in the labor law to avoid any legal complications or disputes.
See Also: Can I Resign after 6 Months in Unlimited Contract
Legal Processes for Discontinuation of the Limited Contract:
The UAE Labour Law outlines specific procedures for terminating a limited contract, applicable to both employers and employees.
Firstly, the initiating party must provide written notice of termination to the other party. Secondly, a notice period, ideally agreed upon mutually, must be observed, with a maximum duration of three months as per the law. Seeking legal advice is advisable if agreement on the notice period is challenging.
Throughout this process, both parties must continue fulfilling contractual obligations. Failure to adhere to these procedures can lead to legal consequences.
So, can you resign after 6 months?
Yes, you can resign from a limited contract in the UAE after 6 months, provided you follow the proper legal steps mentioned above. However, there might be financial implications depending on the terms of your contract and the reason for your resignation.
See Also: Difference Between Limited and Unlimited Contract UAE
What Compensation Can You Expect When a Contract is Terminated?
When an employer terminates an employment contract in the UAE, they must compensate the employee. Employers cap this compensation at 3 months’ gross wages, including both salary and gratuity pay.
You can calculate the exact amount in two ways: either by determining the remaining salary owed under the contract or by using 3 months’ gross wages, whichever is less. If your employment contract specifies a different termination payment, that amount takes priority. Both employer and employee should seek legal guidance to ensure they reach a fair compensation agreement.
To calculate the end of service remuneration according to Article 51 of the employment law:
However, the total severance pay cannot exceed the equivalent of two complete years’ wage.
See Also: Do I Need To Pay If I Resign Under Limited Contract
When Does a Limited Contract End in the UAE?
Contract duration refers to the length of time a contract is valid and enforceable. A limited employment contract in the UAE has a specific end date unlike unlimited contracts. This end date can come about in a few ways:
Natural Expiration: The most common scenario is the contract simply reaching its pre-determined end date as specified in the agreement.
Employer Doesn’t Extend: If the employer chooses not to renew the contract at the end of its term, it automatically expires. The employer is then responsible for paying any earned gratuity pay and any outstanding leave salary.
Mutual Agreement: Both the employer and employee can also agree to terminate the contract early, as long as they do so within the remaining timeframe and comply with all legal requirements. Consulting a lawyer before such termination is advisable.
Even though it’s a limited contract, you still have the right to resign with proper notice, unless your reason for leaving is a violation of UAE Labor Laws by the employer.
End-of-Service Benefits for Limited Contract Employees in the UAE
Eligibility criteria for end-of-service benefits
Gratuity, also known as end-of-service benefits, is indeed a payment legally mandated in many jurisdictions to be provided by an employer to an employee upon the termination of their employment contract.
Employees on a limited contract in the UAE are eligible for end-of-service gratuity, under the current Labour Law. This applies even if the contract isn’t completed. Previously, under the old law, limited contract employees only received gratuity if they finished the entire contract term. Additionally, if they resigned before 5 years, they wouldn’t qualify.
The current law simplifies this. The maximum length for a limited contract is now 3 years, but you can still resign earlier if you wish. As long as you have worked for more than a year, you will be entitled to end of service benefits.
However, if your employment period is less than one year, regardless of termination reason, you won’t be eligible for gratuity.
If you have any questions or concerns about your specific situation regarding gratuity, consulting with a labor lawyer is highly recommended. Additionally, if you believe you are not receiving the amount you deserve, seeking legal advice can be beneficial.They can advise you on your options and even help file a complaint if necessary.
Calculation of end-of-service benefits
In the UAE, calculating gratuity pay for a limited contract employee depends on their years of service. Here’s how to do it yourself:
Find your daily wage: Divide your monthly basic salary by 30 (average days in a month).
Determine the gratuity multiplier: For service under 5 years, use 21. For over 5 years, use 30.
Calculate gratuity: Multiply your daily wage by the gratuity multiplier and the total number of years worked.
Formula: Gratuity = (Monthly Basic Salary / 30 days) x (Gratuity Multiplier) x Years of Service
By applying this formula, with a 4-year contract and a monthly salary of 15,000 AED, your gratuity would amount to (15,000 AED / 30 days) x (21) x 4 years, resulting in AED 42,000.
Remember, the maximum gratuity cannot exceed two years’ salary.
Can a Worker Resign Under a Limited Contract?
The good news is that under the new UAE Labor Law, workers with limited contracts can resign even before the contract ends. However, responsible resignation requires following some steps.
By following these steps, you can ensure a smooth resignation process.
Understanding the Online UAE Labor Card
In the UAE, possessing a UAE labor card is a requirement for employees, as it serves as an official form of identification. Either the relevant free zone where the individual works or the Ministry of Human Resources and Emiratisation (MoHRE) issues this card.
It is mandatory for workers to carry their labor card at all times as it signifies their legal status and employment in the country.
No need to print or carry your contract everywhere. Easily view your contract anytime through the Ministry of Human Resources & Emiratization website (MOHRE) or Tasheel website. Here’s how to access your contract online:
See Also: Can I Resign in Limited Contract
Importance and utility of Labor card in the UAE employment context
The UAE’s labor card acts as a key for employee benefits and adherence to regulations. It provides essential information for payroll systems, health insurance applications, and calculating work hours, sick leave, and annual leave accurately. Setting up employee benefit programs without a valid labor card is not permissible.
Furthermore, the labor card ensures compliance with core UAE labor regulations. These regulations include limitations on working hours, with a maximum of 48 hours per week and 8 hours daily. Additionally, it stipulates reasonable overtime caps, typically set at 2 hours.
Mandated compensation for work hours and overtime is necessary. Furthermore, ensuring fair and safe working conditions with appropriate safety equipment and anti-discrimination policies is also a requirement.
Therefore, it’s crucial to address any labor card issues promptly.
Connect Legal: Your Guide to Resigning from a Contract
Indeed, before making a decision to terminate a limited contract in the UAE, it’s crucial to understand the implications outlined in Article 120 of the UAE Labour Law. This article specifically addresses contract termination and its associated consequences. Employees under a limited contract have the option to resign after completing six months of service. Understanding the specific regulations and procedures governing contract termination is essential.
About Connect Legal:
Connect Legal offers a comprehensive legal network providing access to best lawyers services in the United Arab Emirates. Our team is ready to assist you with employment issues, rental disputes in Dubai, family matters, or property transactions in the Emirates.
We provide expert legal services tailored to your specific needs. Should you have any questions or require guidance on these or any other legal matters, feel free to reach out to our representatives via phone at +971 43 316 688 or email us at contact@connectlegal.ae. Feel free to reach out for assistance, as our dedicated consultants actively provide the support you need.
How does Connect Legal assist in the legal process?
Their team of experienced lawyers possesses a deep understanding of UAE labor laws, specifically regarding contract terminations and employee rights.
Feel free to reach out for assistance, as our dedicated consultants actively provide the support you need.
Throughout the resignation process, Connect Legal actively safeguards your rights by providing essential support.
Moreover, they address inquiries such as “Can I Resign after 6 Months In Limited Contract UAE”. They review your employment contract, clarify options and limitations, and assist in negotiating with your employer. With a focus on legal compliance, they guide you through the process, preventing complications. They provide expert advice and representation to protect your interests in case of disputes.
In essence, Connect Legal acts as your trusted advisor, offering comprehensive support to navigate legal complexities during resignation.
See Also: Domestic Worker Gratuity Calculator UAE
FAQS
The new law clarifies some aspects of termination, like employee rights during termination and end-of-service gratuity entitlement.
Even with a limited contract, you can resign with proper notice. This is typically as per your contract, usually up to 3 months, and following legal requirements.
Depends on your contract. There might be restrictions during probation or early contract termination clauses.
According to UAE Labour Laws, employees under limited contracts in the UAE are subject to a maximum probation period of 6 months.
During the probation period, employees under an unlimited term contract in the UAE have the right to resign at any time. However, for employees under a limited term contract, they typically need to serve a notice period if they wish to resign.
Yes, according to the UAE Labour Law, you can resign after completing six months in a two-year limited contract. Typically, employees who resign receive end-of-service benefits as part of their entitlements. This is particularly true for those who have worked for over a year. Employees with less than a year of tenure may not qualify for these benefits.
Possibly not, depending on your contract. Generally, notice periods are shorter or non-existent during probation
See Also: Jafza Gratuity Rules
