Can I Terminate After 6 Months in Unlimited Contract?

Can I Terminate After 6 Months in Unlimited Contract

It is necessary to mention that there are current changes in the UAE labor law resignation 2022 which differs from the limited contract resignation UAE 2017 or unlimited contract resignation UAE 2020. For its part, the Official Ministry of Human Resources and Emiratization only allows the execution of UAE limited contracts. This generates many questions such as: “Can I terminate after 6 months in unlimited contract?”.

In this article, we will explain the question: “Can I terminate after 6 months in UAE?” For this, there will be a fairly complete answer to each of the following questions:

  1. Types of employment contracts in the UAE
  2. How to terminate an employment contract in the UAE?
  3. Can I terminate after 6 months in unlimited contract?
  4. The Notice period for limited contract in UAE
  5. What are the compensations when an employer terminates a contract?
  6. What are the elements of an employment contract in the UAE?
  7. How can we help your company to terminate the contracts of its employees?

1. Types of employment contracts in the UAE

Can I Terminate after 6 Months in Unlimited Contract

It is always recommended that an employer sign an employment contract with a new employee. To do this, you must choose between the types of contracts in the UAE to reduce risks in the event of possible litigation with this new employee and so that the working conditions are clearly established in this document.

It is important to note that with the entry into force of the new UAE Labor Law, only companies are allowed to offer their employees limited contracts.

For its part, many companies still have employees with UAE unlimited contracts. The Law states that they will become a limited contract within the year following the effective date of that contract. Therefore, it is most likely that companies do not agree to an unlimited employment relationship with their workers.

But since these changes are recent and there are still workers under the figure of unlimited contract, it is important to know these types of contracts:

1.1 What is limited contract in UAE?

Limited contracts in UAE are those that have a specific expiration date. Normally, it is usually the duration of the employee’s visa. Therefore, limited employment contracts in the UAE are usually two to three years.

In other words, the employment contract will automatically end on the date set forth in it. Although, either party can decide to end it earlier both parties must agree. Normally, limited contracts in UAE 2022 do not have a specific provision about a period of notice since, logically, this ends automatically on the date of expiration. But if one of the parties wishes to terminate the contract, it will be necessary to present a period of notice.

On the other hand, limited employment contracts are more useful for those companies that require hiring for certain periods of time and not in an unlimited way, such as a specific construction project.

1.2 What is an employment contract for unlimited time?

An indefinite contract is one in which the parties to the employment relationship did not establish time limits in the provision of labor services in terms of the duration of the contract. In other words, this type of contract remains in force over time until the company, the worker, or both parties decide to end it in compliance with the requirements of the law.

These contracts are of indefinite duration. But this does not mean that any of the parties cannot terminate it with a valid justification.

In this sense, either the employer or the employee can terminate the unlimited employment contract by arguing a valid justification.

For its part, this type of contract is more flexible than limited employment contracts. Obviously, this is a great solution for those companies and employees who intended to stay in the UAE for a long period and who were not under the realization of a specific project.

2. How to terminate an employment contract in the UAE?

Now that we have more knowledge about the types of employment contracts in the UAE, we can now explain how to terminate an employment contract in the UAE.

Depending on the type of contract there are a series of legal requirements for each of them:

2.1 Limited contract resignation 2022

Can I Terminate after 6 months in limited contract in the UAE?

On the subject of the limited contract resignation, either party may terminate a limited employment contract as long as there are valid justifications for doing so.

The termination of this type of contract must be by mutual agreement between the parties. In the event that the worker wants to resign from the contract before the end of its expiration date, he must notify his employer in writing and carry out the corresponding notice that has been established in the contract. The duration of this notice cannot be less than 1 month nor more than 3 months.

2.2 Resign during probation period UAE

Likewise, when it comes to Resignation during probation period in limited contract, the employee must provide 14 days’ notice if he will leave the country and if he is resigning during probation in UAE  he must provide 1 months’ notice if it is because he will work in another company.

2.3 Other causes to terminate the employment contract before its expiration

On the other hand, there are reasons that give rise to the employee resigning from the limited employment contract before its expiration date if any of these situations exist:

  • If the employer does not meet the contractual conditions.
  • If the employer assaults you or attempts to physically assault you.
  • In the event that the employer assigns jobs other than those provided for in the contract without their consent.

2.4 How can I resign with limited contract in UAE?

There is a new Labor Law for limited contract in UAE. UAE law has provisions specifically in the UAE Labor Law resignation limited contract that regulate the UAE limited contract resignation by the employee. The employee must have noticed which is normally 30 between 30 days and 3 months. Therefore, when it is the employee who terminates the contract, there will be no compensation in his favor.

3. Can I Terminate after 6 months in unlimited contract?

In the case of the employee, the working time in a company is indifferent. That is, the employee can resign from his job at the time he wishes.

3.1. Can I resign during probation period in unlimited contract?

Even there may be a resignation during probation period in UAE in 2022 specifically resignation during probation period unlimited contract UAE. To do this, the employee must provide a notice period.

3.2 Termination of the unlimited contract UAE by the employer

Regardless of the type of employment contract between a company and its employee, either party can terminate it as long as they comply with a period of notice. According to the UAE Labor Law resignation, in the event that the employer does not notify the employee in writing of the prior notice, he must pay compensation. Therefore, this payment will act as notice.

In the event of an unlimited contract resignation during probation, the notice period will last 14 days if the employee must leave the country and 30 days if he was hired by another company.

For its part, in some situations, the unlimited contract resignation by the employer can happen without informing the employee of the prior notice provided that the following events occur:

Unlimited Contract Resignation UAE 2022.

  • Falsification of documents by the employee.
  • When the employee repeatedly fails to comply with the orders and functions for which he was hired.
  • When an employee violates superior instructions, putting the company’s security at risk.
  • Poor performance in the functions of the employee.
  • When the employee incurs in the disclosure of professional, industrial, or commercial secrets.
  • If the employee is found working while intoxicated or under the influence of drugs.
  • That assaults or attempts to physically assault any member of the organization.
  • In the event that an employee is hired by another company without having completed the process to terminate his contract.
  • When the employee does not attend work for more than 20 intermittent days or more than 7 consecutive days in a month without valid justification.
  • That the employee illegally uses his position in the company to obtain personal benefits.

4. The notice period for limited contract in UAE

Can I Terminate after 6 Months in Unlimited Contract

Notice is the act by which any of the parties to the employment relationship notifies the other of their desire to terminate the employment relationship. This act must be notified with sufficient legal time to give the other party time to take the corresponding provisions. This situation occurs mostly in resignation under unlimited contract.

5. What are the compensations when an employer terminates a contract?

Already having a good notion of the answer to the question:  “Can I terminate after 6 months in unlimited contract?” When it comes to national workers we talk about end-of-service benefits or payment of tips. For this, the employer must comply with the social security regulations in the UAE.

Now, when we talk about a foreign employee regardless of what type of contract he is working under, the calculations will be as follows:

  • In case the employee has been working in the company for less than a year, he will not be entitled to any payment.
  • If the employee has between one and five years working in the company, the full tip payment will be twenty-one days of salary for each year worked.
  • If the employee has been in the company for more than five years, he will be entitled to the payment of 30 days of salary for each year worked after five years. In other words, if the employee worked for 8 years in the company, they should receive a compensation of 3 months’ salary on termination. Or if the employee worked 5 years and 6 months, this will be proportional and the company will pay him a limited contract of 45 days’ salary.

The payment of tips in no case may not exceed the amount equivalent to two years of salary. Hence the importance of having the support of an expert company in payroll matters that provides services for your company.

6. What are the elements of an employment contract in the UAE?

There are many elements that must be part of any employment contract regardless of its type. In this sense, contractual provisions must exist for the conditions that may arise in the employment relationship, such as limited contract notice periods, the termination of unlimited contracts, etc.

Every employment contract in the UAE must have the following elements:

  • The identification of the parties, the company, its legal representative, and its worker, and indicate in the contract if the worker is a national or a foreigner since the working conditions change depending on the employee’s condition in this regard.
  • Start date of the employment contract.
  • The Expiration date of the contract for cases of limited employment contracts.
  • Nature of work. That is, the contract must specify in the best way what functions the employee will perform for the company. This is in order to avoid misunderstandings between the employer and the employee.
  • Working hours. Including how many days a week the employee will work in the company and what those days are. Likewise, the contract must specify the time of entry and exit from the workplace, as well as whether the worker will have free hours to be absent from the workplace.
  • Remuneration and its form. That is if the payment will be weekly, fortnightly, or monthly. Likewise, the contract must clearly specify the different types of additional work incentives, such as commissions and the conditions to be met for their payment.

7. How can we help your company to terminate the contracts of its employees?

On some occasions you may have doubts about: “Can I terminate after 6 months in unlimited contract?” or “Can I resign in limited contract?” Remember that when looking to expand your business, a new country means new laws. In this sense, mismanagement of labor relations can bring legal consequences for your company in a totally unnecessary way.

Without a doubt, PEO Middle East will offer you the best business advisory services that you can find in the country since we have the necessary knowledge and experience that guarantee us to be the leading comprehensive business solutions company in the UAE market. We provide services in:

If you have questions like: “Can I terminate after 6 months in unlimited contract?” send them at: [email protected] and we will help you. For this, our team will attend to you quickly to resolve all your doubts at +971 43 316 688.

But if what you want is a job opportunity with a large UAE company such as PEO Middle East, send us your CV to: thetalentpoint.com or via email to: [email protected]. Our recruiters are always attentive to receiving and analyzing all CVs in search of the best talent for our company.

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