UAE Labour Law Termination Process 2025: Complete Employer & Employee Guide

Introduction: Understanding UAE Employment Termination Laws

The UAE continues to lead global hiring trends, ranking No. 1 worldwide in hiring optimism for 2025 with an impressive Net Employment Outlook of +48%. For employers and employees operating in this dynamic market, understanding and complying with UAE labour law termination requirements under Federal Decree-Law No. 33 of 2021 is essential for legally terminating employment contracts in the UAE.

Who Has the Authority to Terminate Employment Contracts in the UAE?

Under UAE labour law, employment termination rights extend to:

• Employers (with valid cause and proper procedures)
• Employees (with or without cause, following resignation protocols)

Critical Note: While UAE employers can terminate employment contracts for valid reasons, specific legal procedures must be followed. Arbitrary dismissals without proper cause can result in significant penalties and legal consequences for employers.

Please note: Employees looking for the UAE labour law termination process can refer to Kayrouz & Associates' UAE Labor Law Resignation Rules 2025 Guide.

UAE Labour Law Termination Grounds: When Can Employment Contracts Be Terminated?

According to Article 42 of Federal Decree-Law No. 33 of 2021, UAE employment contracts can be legally terminated under the following circumstances:

Voluntary Termination Methods

• Mutual Agreement: Both employer and employee agree in writing to terminate the employment relationship
• Contract Expiry: Fixed-term UAE employment contracts that reach their natural expiration date without renewal or extension

Involuntary Termination Circumstances

• Employer's Death: When the employment contract is personally tied to the employer
• Employee Death or Permanent Disability: Termination due to employee death or medical inability to work (requires medical certification)
• Criminal Conviction: Employee conviction by final court judgment involving freedom-restricting measure for three months or more
• Business Closure: Permanent establishment closure in accordance with UAE legislation
• Bankruptcy or Insolvency: Employer's financial insolvency or exceptional economic circumstances preventing business continuation
• Work Permit Issues: Employee's inability to renew work permits due to circumstances beyond employer control
• Unilateral Termination: Employees may resign with or without cause; employers must demonstrate valid cause for termination

Professional Tip: Consulting with experienced UAE employment attorneys before initiating termination procedures can prevent costly penalties and reduce legal risks associated with labour complaint investigations by the Ministry of Human Resources and Emiratisation (MoHRE).

Get Expert Legal Guidance: Take a free consultation with Kayrouz & Associates Employment and Labor Law Team.

UAE Labour Law Notice Period Requirements: Termination Timeline Rules

Article 43 of UAE labour termination legislation establishes mandatory notice periods that must be observed when terminating employment agreements. The specific duration depends on contractual agreements between employers and employees.

Standard Notice Period Framework:

• Minimum Notice Period: 30 calendar days
• Maximum Notice Period: 90 calendar days
• Probationary Period Notice: 14 calendar days

Notice Period Alternatives

Either party may waive the notice period requirement by providing compensation equivalent to the employee's salary for the remaining notice period duration.

Immediate Termination Without Notice: When UAE Employers Can Act Instantly

While most UAE labour law terminations require proper notice, Article 44 specifies exceptional circumstances permitting immediate termination without notice:

Grounds for Instant Dismissal

• Identity Fraud: Employee use of false identity, impersonation, or submission of forged documents/certificates
• Gross Negligence or Deliberate Damage: Serious errors causing material loss or intentional property damage (employer must notify MoHRE within 7 working days)
• Safety Violations: Breach of written workplace safety instructions clearly posted and acknowledged by employee
• Persistent Duty Failure: Continued failure to perform essential job duties despite written investigation and two formal dismissal warnings
• Confidentiality Breaches: Unauthorized disclosure of trade secrets or intellectual property resulting in damages or personal benefit
• Substance Abuse: Being under the influence of alcohol or controlled substances during work hours, or engaging in immoral conduct at workplace
• Workplace Violence: Physical, verbal, or other forms of assault against employer, supervisors, managers, or colleagues
• Excessive Absenteeism: Unauthorized absence exceeding 20 non-consecutive days annually or 7 consecutive days
• Position Abuse: Unlawful exploitation of job position for personal gain
• Unauthorized Secondary Employment: Working for another employer without following proper UAE labour law procedures

Legal Requirement: Employers must conduct written investigations and provide formal dismissal documentation to employees when terminating without notice.

Prohibited Termination Practices: What UAE Employers Must Avoid

UAE labour legislation defines certain terminations as illegal or arbitrary when proper procedures aren't followed:

Unlawful Termination Scenarios

Retaliation-Based Dismissals

Per Article 47, terminating employees after they file legitimate labour complaints with MoHRE or pursue legal action against employers constitutes arbitrary dismissal.

Pregnancy and Maternity Discrimination

Article 30(8) explicitly prohibits terminating female employees due to pregnancy, maternity leave, or related work absences protected under UAE law.

Consequences of Arbitrary Dismissal Claims

Successful arbitrary dismissal claims result in:

• Reputational Damage: Decreased establishment ratings and increased MoHRE regulatory scrutiny
• Financial Penalties: Compensation payments determined by employment contract terms, work type, and damage extent

Business Protection Services: Kayrouz & Associates Employment and Labour Law Team provides expert assistance with Employee Layoffs and Restructuring, plus Employment and Corporate Dispute Resolution to minimize operational disruptions during UAE employment contract terminations.

Why Professional Legal Support Is Essential for UAE Labour Law Compliance

UAE termination procedures involve complex requirements including end-of-service benefits under Article 51 and mandatory disciplinary procedures under Article 39, requiring written warnings before termination for misconduct.

Employment termination should only occur for serious violations and must be supported by comprehensive documentation, records, and written investigations to minimize legal and financial exposure.

Kayrouz & Associates Employment Law Expertise

Our specialized Employment and Labour Law team provides comprehensive services including:

• Employee benefits and executive compensation planning
• Strategic employee layoffs and corporate restructuring
• Employment agreement drafting and contract review
• Labour law judicial review and representation
• Professional workplace investigations
• Workplace safety compliance consulting

Trusted UAE Legal Partnership Since 2006

Kayrouz & Associates has served as a reliable legal partner for diverse establishments since 2006. As a full-service law firm, we deliver globally recognized legal services throughout the UAE and Middle East region.

Contact Information: Send us a message or visit our offices to ensure ongoing compliance with UAE labour law requirements.