2. How much notice is required to terminate an employment contract in the UAE?

For employees who have completed probation, the notice period generally ranges from 30 to 90 days, depending on the employment contract. During probation, different notice rules apply based on whether the employee is leaving the UAE or joining another employer.

3. Is an employee entitled to gratuity after termination in the UAE?

Yes. Employees who complete at least one year of continuous service are generally eligible for end-of-service gratuity, except in certain circumstances permitted under UAE Labor Law. The gratuity amount is calculated based on the employee's basic salary.

4. Can an employer terminate an employee without giving a reason?

An employer may terminate an employment contract by providing the required notice, but the termination cannot be discriminatory, retaliatory, or in violation of UAE Labor Law. Employers should maintain proper documentation to justify employment decisions if challenged.

5. What are an employee's rights after termination in the UAE?

After termination, employees are generally entitled to receive their final salary, payment for accrued annual leave, end-of-service gratuity (if eligible), notice pay where applicable, and any other contractual or statutory dues. They may also benefit from the applicable visa grace period before leaving the UAE or transferring to a new employer.

Termination of Employment in UAE

Q: 1. What are the legal grounds for termination of employment in the UAE?

Under UAE Labor Law, employment can end through resignation, mutual agreement, contract expiry, employer-initiated termination with notice, termination during probation, or immediate dismissal under Article 44 for specific acts of gross misconduct.

Termination of Employment in UAE refers to the legal process of ending an employment relationship between an employer and an employee. Governed by the UAE Labor Law, termination can occur for various reasons, including resignation, mutual agreement, contract completion, or employer-initiated dismissal. Understanding the rules around notice periods, end-of-service benefits, employee rights, and employer obligations is essential to ensure a smooth and compliant transition for both parties.

Whether you are an employer managing workforce changes or an employee navigating the end of a job, staying informed about UAE termination laws can help avoid disputes and ensure fair treatment.

In this guide, we'll explore everything you need to know about employment termination in the UAE, including legal requirements, compensation, notice periods, and best practices for handling the process professionally.

Types of Termination Under UAE Labor Law

Before the specific articles, it helps to understand the different ways an employment contract can end. Each carries different obligations and consequences.

Termination by mutual agreement. Both parties agree in writing to end the contract, usually the smoothest exit, with negotiated notice and a clean final settlement.
Resignation by the employee. The employee leaves voluntarily, serving the agreed notice (typically 30 to 90 days) or paying compensation in lieu of it.
Employer-initiated termination with notice. The most common form. The employer terminates the contract by serving the written notice required under the contract. A reason isn't strictly required, but it must not be discriminatory or retaliatory (more on that below).
Termination without notice by the employer. is allowed only in the serious cases listed under Article 44, such as fraud, assault, gross misconduct, and similar offenses. Employers should also ensure proper payroll management by accurately calculating and settling all final dues, salary payments, and statutory entitlements in accordance with UAE Labour Law.
Termination without notice by the employee. Permitted under Article 45 when the employer is seriously at fault.
Contract expiry. A fixed-term contract simply ends at the end of its term. Non-renewal is an expiry, not a dismissal.
Arbitrary or wrongful dismissal. When a termination breaches the law's substantive or procedural requirements, it can trigger court-ordered compensation.
Force majeure or business closure. If a business permanently closes or becomes insolvent, contracts can lawfully terminate, but final settlements and gratuities still apply.

Did You Know? A Few Things People Get Wrong

Most people assume only employers end employment, but employees can also exit immediately, without penalty, when the employer is at fault. An employee who is assaulted or harassed at work has just 5 working days to report it to the authorities and MoHRE and still keeps full end-of-service entitlements.

Verbal terminations carry little legal weight. UAE labor law requires written notice, and the work permit and contract must be formally canceled through MoHRE's systems. A manager who "fires" someone verbally without following the proper process has not, in legal terms, completed a valid termination.

And here's one that surprises people: being dismissed for gross misconduct under Article 44 is the opposite of an arbitrary dismissaland in those cases, the employer may lawfully withhold gratuity. Even then, the employee is still owed wages for days already worked and any accrued, unused leave. Forfeiture of gratuity isn't automatic and can be challenged before MoHRE or the courts.

Article 42 – When an Employment Contract May Be Terminated

Under Article 42 of Federal Decree-Law No. 33 of 2021, employment may lawfully end in the following situations:

Contract expiry without renewal: the term ends, and neither party extends it.
A mutual written agreement between the employer and the employee.
A negotiated exit on agreed notice and transition terms.
Death of the employee: the contract ends automatically, and all dues plus the full and final settlement are paid to the family.
Death of the employer, where the contract was tied to that individual specifically.
A custodial criminal sentence of three months or more was imposed on the employee.
Permanent business closure in compliance with UAE law.
Employer insolvency or bankruptcy, or a severe financial crisis.

2026 note: All terminations, including those due to closure or insolvency, should be communicated in writing and properly recorded via MoHRE's official channels. Verbal or informal terminations don't satisfy the law.

Article 43 – Termination Notice Period in 2026

The termination notice period is one of the most contested aspects of UAE labor law. Article 43 sets clear, enforceable rules.

Written notice is mandatory. Any termination by either side must start with a formal written notice to the other party. It cannot be waived unilaterally.

Duration: 30 to 90 days. The notice period is a minimum of 30 days and a maximum of 90, as agreed in the contract. If the contract is silent, the default is 30 days. The same range applies to both employer and employee.

Full pay continues. Throughout the notice period, the employee receives their complete wage, allowances, and benefits. No reductions are allowed.

Work continues too. Unless otherwise agreed, the employee continues performing their duties during the notice period. Walking off mid-notice can trigger a compensation claim.

Compensation in lieu of notice. applies if either the employer or employee shortens the required notice period. In such cases, the party ending the notice early must pay the other for the unserved days. This compensation is calculated based on the employee's total salary (basic salary plus allowances), unlike end-of-service gratuity, which is calculated only on the basic salary. A UAE Salary Calculator can help employers and employees accurately estimate salary in lieu of notice and other final settlement payments.

Job-search leave. When the employer initiates the termination, the employee is entitled to one paid day off per week during the notice period to look for new work. This cannot be withheld.

Mutual waiver. Both parties may agree in writing to shorten or waive notice, provided it doesn't disadvantage the employee. A verbal understanding doesn't count.

Employer tip for 2026: Contracts that don't specify the notice duration create real legal exposure. Vague notice clauses are a leading cause of complaints filed with MoHRE. Always state the agreed notice period clearly.

Article 44 – Termination Without Notice by the Employer

Article 44 permits an employer to dismiss an employee immediately with no notice and no pay in lieu, but only in specific, serious situations and only after following due process.

Grounds include: submitting forged identity documents or qualifications; gross negligence causing substantial loss or deliberate damage to company property, repeatedly ignoring written safety instructions, persistent failure to perform duties despite documented warnings, disclosing confidential or proprietary information, being intoxicated or under the influence at work, physical assault or violence against the employer, a manager, or a colleague, abuse of position for personal gain, taking unauthorized secondary employment, and unjustified absence (more than 20 intermittent days, or 7 consecutive days, in a year).

Due process matters. The employer must conduct and document a written investigation before dismissing, and the dismissal notice itself must be written and justified. For certain grounds (such as causing material loss), the employer must also notify MoHRE within 7 working days of becoming aware of the incident. Skipping these steps can turn a lawful summary dismissal into an unlawful one.

On gratuity: in genuine Article 44 cases, end-of-service gratuity may be forfeited, but this is not automatic and can be challenged if the dismissal is disputed. Regardless of the reason for termination, the employee remains entitled to receive unpaid wages and payment for accrued annual leave up to the termination date. A UAE Gratuity Calculator can help estimate potential end-of-service benefits where gratuity eligibility applies.

Article 45 – Termination Without Notice by the Employee

Employee protections are just as real. Article 45 lets an employee leave immediately, keeping their full end-of-service entitlements, in four situations:

Employer breach of obligations, for example, withholding salary or denying legal entitlements. The employee must first notify MoHRE, and the employer then has 14 working days to fix the breach after being notified. If they don't, the employee can leave.
Assault, violence, or harassment by the employer or their representative, including sexual harassment. The employee must report it to the relevant authorities and MoHRE within 5 working days of being able to report.
A grave danger to health or safety that the employer knows about and fails to remove.
Being assigned fundamentally different work from the contract without written consent (except for genuine emergencies under Article 12).

In all four cases, the employee keeps gratuity and any outstanding dues; no penalty applies for leaving without notice when the conditions are met.

2026 note: MoHRE complaints can now be filed entirely online via its website or mobile app, no office visit is required. Keep written evidence (emails, MoHRE communications, medical reports) since these claims are often contested.

Article 47 – Arbitrary and Unlawful Dismissal in 2026

This is the most misunderstood area, so it's worth being precise. The broad "arbitrary dismissal" concept from the old 1980 law was narrowed under the 2021 law.

What Article 47 actually covers. A termination is treated as unlawful (illegal) when it is in retaliation for the employee either (a) filing a legitimate complaint with MoHRE, or (b) filing a valid legal claim against the employer that is later proven correct. Dismissing someone for exercising those rights is prohibited by Article 47.

This is narrower than many older articles online suggest. A dismissal simply made without a stated reason is not automatically considered arbitrary under the current UAE Labour Law. However, it can still be challenged as unlawful if it is discriminatory, retaliatory, or violates legal procedures. Maintaining accurate timesheet management and comprehensive employee records can help employers demonstrate compliance and support fair employment decisions in the event of a dispute.

How to file a complaint:

Step 1 – File with MoHRE. Submit a complaint online via the MoHRE website or smart app, or call the MoHRE helpline (600590000). MoHRE attempts an amicable settlement first.
Step 2 – Mediation. MoHRE mediates between the parties and generally aims to reach a settlement within around two weeks. For claims up to AED 50,000, MoHRE can issue a binding decision with the force of a court order.
Step 3 – Court. If mediation fails (or the claim exceeds AED 50,000), the case is referred to the competent Labor Court, where both sides present evidence.

The compensation cap is important. If the court finds the dismissal unlawful, compensation is capped at three months' wage, calculated on the employee's last salary, and assessed by the court based on the nature of the role, length of service, and harm suffered. Crucially, this compensation is in addition to notice-period pay and end-of-service gratuity; it does not replace them. (Older content claiming "no maximum" reflects the repealed 1980 framework and is no longer correct.)

Can an Employee Be Terminated During Probation in the UAE?

Yes, but the probation termination rules differ from those that apply after an employee is confirmed. Under UAE Labour Law, the probation period cannot exceed six months and cannot be extended or repeated for the same employer. During this period, using employee engagement software can help employers improve communication, monitor employee feedback, and support a smoother onboarding experience, reducing the likelihood of early turnover. During probation:

Either party can terminate with 14 days' written notice.
If an employee resigns to join another UAE employer, they must give 30 days' notice, and the new employer may have to reimburse the previous one for recruitment costs.
If an employee is leaving the UAE entirely, 14 days' notice applies.

One trap to watch out for is that a foreign worker who leaves the UAE during probation without following the required notice rules may face a one-year work permit ban. Although probation counts toward continuous service, end-of-service gratuity is only payable after completing at least one year of service. As a result, termination within the first six months usually means no gratuity. However, employees are still entitled to unpaid wages, accrued annual leave, and Leave Salary Calculation in UAE should be completed accurately to ensure all outstanding leave encashment is paid in accordance with UAE Labour Law.

Does an Employee Receive Gratuity After Termination?

End-of-service gratuity in the UAE is one of the most-searched topics on termination, so here are the mechanics.

You qualify once you've completed at least one year of continuous service. The calculation is based on basic salary only (not allowances):

21 days' basic wage for each of the first five years of service.
30 days' basic wage for each year beyond the fifth year.
Pro-rated for partial years, and capped at two years' total wage.

A worked example: on a basic salary of AED 10,000, six years of service gives 21 × 5 = 105 days (AED 35,000) plus 30 days for year six (AED 10,000), a total of AED 45,000.

A few key points: under the 2021 law, employees who resign after completing a year receive full gratuity (a major change from the old system). Gratuity can be forfeited only in genuine Article 44 gross-misconduct cases. And the law requires all final settlement dues, gratuity, unpaid salary, leave encashment, and notice pay to be paid within 14 days of the last working day. Unused annual leave is paid separately from gratuity, not folded into it.

Can an Employer Terminate an Employee Without a Valid Reason?

This surprises many people: under the 2021 law, an employer can terminate a standard contract by serving proper written notice without having to prove traditional "cause." All normal entitlements (notice pay, gratuity, leave encashment) still apply.

However, the reason behind the termination cannot be discriminatory, retaliatory, or linked to an employee filing a complaint or lawsuit. If it is, the termination becomes unlawful under Article 47 and may expose the employer to compensation. While termination without stating a reason is technically possible with the required notice, employers are strongly advised to document a legitimate business justification. Implementing a performance management system helps maintain clear performance records, objective evaluations, and documented improvement plans, providing valuable evidence to support fair termination decisions if a dispute arises.

What Happens to Your UAE Visa After Employment Termination?

For expats, the visa question is often the most urgent one.

When employment ends, the employer must cancel the work permit/labor card through MoHRE and then the residence visa through ICP/GDRFA. The employee signs the cancellation application, and it's wise to confirm that the cancellation was processed correctly.

After cancellation, a grace period applies before you must leave or regularise your status:

Standard employment and residence visas typically provide a grace period of 30 to 60 days after cancellation (Dubai commonly grants 60 days). For mainland employees, the grace period generally begins from the labor card cancellation date, while for free-zone employees, it starts from the residence permit cancellation date. Using modern HR software can help employers streamline offboarding, track visa cancellation timelines, and ensure compliance with UAE immigration and labor regulations.
Golden Visa, Green Visa, and highly skilled (MoHRE Skill Level 1–2) holders: up to 180 days.

Overstaying triggers a fine of AED 50 per day. During the grace period, you can transfer to a new sponsor, change your status, or if eligible, switch to a self-sponsored Green Visa or a jobseeker visa (60, 90, or 120 days). On a labor ban: there is no automatic ban for simply resigning. A one-year work-permit ban applies only in defined situations, such as resigning during probation without an employer breach, a proven absconding (work-abandonment) report, or a fictitious-establishment cancellation.

Termination Scenarios at a Glance

Termination Scenario	Notice Period Required	End-of-Service Gratuity Eligibility
Resignation (after probation)	Yes (30–90 days, as per employment contract)	Yes (if the employee has completed at least 1 year of continuous service)
Contract Expiry / Non-Renewal	No (employment ends upon contract expiry unless renewed)	Yes (if the employee has completed at least 1 year of continuous service)
Employer-Initiated Termination (with notice)	Termination (with notice) Yes (30–90 days, as per employment contract)	Yes (if the employee has completed at least 1 year of continuous service)
Summary Dismissal for Gross Misconduct (Article 44)	No	Generally not eligible if dismissed under Article 44, subject to applicable legal provisions
Employee Resignation Due to Employer Breach (Article 45)	No	Yes (if the employee has completed at least 1 year of continuous service)
Arbitrary / Unlawful Dismissal (Article 47)	Yes (plus compensation of up to 3 months' salary, where applicable)	Yes (if the employee has completed at least 1 year of continuous service)
Termination During Probation	14 days' notice (or 30 days if joining another UAE employer)	Generally not eligible, as gratuity requires at least 1 year of continuous service

Termination Scenario

Notice Period Required

End-of-Service Gratuity Eligibility

Resignation (after probation)

Yes (30–90 days, as per employment contract)