UAE Labour Law Guide: Leaving Your Job?

When leaving your job in the UAE, it’s important to understand the local labor laws for a smooth transition and protection of your rights. Whether you’re resigning voluntarily or your employment is ending for another reason, knowing your legal entitlements can help you better understand the process.

In this guide, we will highlight key topics related to your legal rights as per the UAE labour law, including the resignation process and any compensation you may be entitled to. This includes understanding the notice period, the procedures for submitting a resignation, and the impact of your actions on end-of-service benefits. 

How to Resign from a Job in the UAE?

When resigning from your job in the UAE, it’s important to follow the correct legal procedures. Failing to do so can lead to potential complications, such as loss of benefits or legal disputes. Here are key steps for legal resignation under the UAE labour law:

Know the Key Terms of the UAE Resignation Law

Before resigning from your job in the United Arab Emirates, it’s essential to understand the key terms of the labour law for resignation in the UAE. It’s important to understand how the terms of your contract, including its duration and renewal clauses, impact your rights to end-of-service benefits and other compensations. 

According to Article 8(4) of Federal Decree-Law No. (33) of 2021, if your contract is extended or renewed, the new term(s) will be considered an extension of the original contract and will be added to the calculation of your continuous term of service. This is important when calculating entitlements like gratuity or other benefits.

The new UAE labour law also abolished “unlimited” contracts, now only allowing fixed-term or limited contracts. Understanding these aspects of your contract is important to ensure a smooth resignation process while complying with the law.

Review Your Employment Contract Before Resigning

Your employment contract outlines specific obligations and rights that you must adhere to when resigning. Before submitting your resignation, the labour law for resignation in the UAE requires that employees fully understand their contractual obligations, including the notice period and any clauses that may affect their resignation process. 

Depending on the terms of your contract, you may be required to serve a notice period of one to three months. Additionally, many contracts include clauses such as non-compete agreements, which restrict employees from joining competitors after leaving the company. If such clauses are present, make sure to follow them to avoid legal complications.

Make Sure to Avoid Absconding Cases

Absconding refers to leaving your job without informing your employer or without completing the required notice period. In the UAE, absconding is a serious legal issue that can result in a ban on working in the country, along with fines or legal actions. 

It is important to formally resign through a written notice to your employer, keeping a copy for your records. If an employee fails to report to work for seven or more days without providing any valid reason, they are considered an absconder under the resignation rules. Being labeled as an absconder can lead to serious consequences, including legal action, fines, and a potential ban on working in the UAE. 

Step-by-Step Guide to Resigning Legally in the UAE

Resigning from your job in the UAE requires careful attention to detail to ensure that you follow the proper legal procedures and protect your rights. Here are the key steps to legally resign in the UAE:

1. Discuss Your Plans with Your Employer

Before submitting your resignation, it’s a good idea to discuss your intentions with your employer. Having a conversation helps maintain a professional relationship and can provide clarity on the next steps. You may also receive feedback that could influence your decision, whether that’s staying or moving forward. 

2. Submit a Formal Resignation Letter

Once you’ve decided to resign, it’s essential to submit a formal resignation letter via email or hand-deliver it to your manager. This letter should be written professionally, clearly stating your intention to resign and the date you plan to leave. 

3. Weigh the Counteroffer

After submitting your resignation, your employer may present a counteroffer to persuade you to stay. It’s important to carefully consider the terms of the counteroffer and evaluate whether it meets your career goals and personal needs. 

4. Serve the Notice Period

Serving your notice period is a critical step in resigning legally in the UAE. The notice period, which can range from one to three months, is typically outlined in your employment contract. Failing to fulfill this requirement may result in penalties, such as the forfeiture of end-of-service benefits or legal action from your employer. 

5. Calculate Your Gratuity

As part of your resignation, you are entitled to receive end-of-service benefits, commonly known as gratuity. Gratuity is calculated based on your length of service and final salary. Make sure to calculate your gratuity accurately and check with your employer to confirm the amount. Be aware of any adjustments for unused leave or unpaid dues, as these can impact your final payout.

New Alternative End-of-Service Benefits Scheme: In November 2023, the UAE introduced an alternative voluntary scheme for end-of-service benefits, allowing workers to earn returns on their gratuity savings. This new system gives employees the option to have their end-of-service gratuity deposited into a fund, which can generate returns over time. It offers the advantage of potentially increasing the amount received upon resignation or job loss, providing an additional financial benefit. This voluntary scheme is available to private-sector employers and employees, including those in free zones. 

6. Return All Company’s Confidential Documents

Resignation rules in UAE necessitate employees to return any confidential company documents, equipment, or intellectual property in their possession. This includes any work-related files, laptops, phones, or other materials provided by the employer. Failing to return these items can result in legal consequences or financial penalties, and could affect the professional reputation of the employee.

Rights and Benefits for Employees Resigning in the UAE

When resigning from your job in the UAE, it’s essential to understand your rights and benefits under the law. This includes knowing your entitlements to gratuity, insurance, and repatriation benefits, ensuring you leave with financial security and peace of mind.

Gratuity for Full-Time Private Sector Workers

As a full-time private sector worker in the UAE, you are entitled to receive end-of-service gratuity after completing one year of continuous service. The gratuity is calculated based on your final salary and length of service. For the first five years, it’s typically 21 days of salary for each year worked, and after five years, it increases to 30 days per year. This payment is made in addition to your final salary and unused leave days.

The Unemployment Insurance Scheme (ILOE)

The UAE’s unemployment insurance scheme, known as ILOE (Insurance Against Loss of Employment), provides financial support to workers who lose their job involuntarily. The scheme offers compensation for a limited time to help ease the transition while searching for new employment. Employees contribute a small monthly premium to this fund, which is designed to assist workers during periods of unemployment. Eligibility criteria include meeting minimum employment duration and other specific conditions. 

Repatriation Ticket for Expat Workers

Expatriate workers in the UAE are entitled to a repatriation ticket which is a right guaranteed to private sector employees upon the termination of their employment. This benefit ensures that employees can return to their home country without bearing the cost of the airfare. The employer is responsible for providing the ticket, typically at the end of the contract or upon resignation. This benefit applies to employees who have completed their contract term or are leaving the country for a valid reason. 

Moving Ahead After Your Resignation in the UAE

Transitioning to a new role or career after resigning can be an exciting but challenging time. It’s important to approach this change thoughtfully, ensuring a smooth shift while protecting your financial and legal interests. Here are some key tips to help you move ahead confidently:

• Maintain professionalism during notice period, continue to work diligently and keep a positive attitude.
• Request experience letter and salary certificate for future job applications.
• Budget for the transition period and potential gaps in income.
• Make sure all legal entitlements, such as gratuity or insurance, are received.
• Utilize your professional networks for job opportunities.
• Stay positive and welcome the change as a new opportunity for growth.

Conclusion

Resigning from your job in the UAE involves understanding important legal steps to ensure a smooth exit. This guide provides you with essential information on your rights, including the resignation process, end-of-service benefits, and the impact of your actions. By following the proper procedures, such as reviewing your employment contract and serving your notice period, you can protect your financial interests and future job opportunities. Stay informed and prepared to manage your resignation professionally and efficiently under the UAE labour law.

Frequently Asked Questions (FAQs)

Can I Resign During the Probation Period?

Yes, you can resign during the probation period in the UAE. However, the notice period may be shorter than the standard notice period stipulated in the contract. Typically, during probation, the notice period can be as short as 1 week, but this varies depending on the terms in your employment contract. 

Will I Receive a Gratuity if I Resign After 6 Months?

According to UAE labour law, employees are entitled to receive gratuity only after completing at least one year of continuous service with the employer. If you resign after 6 months, you will not be eligible for gratuity. However, if your resignation is due to employer misconduct or other qualifying circumstances, you might still be entitled to compensation.

What Happens if I Don’t Serve My Notice Period?

Failure to serve the notice period in the UAE can lead to penalties, including forfeiture of your end-of-service benefits (gratuity). Your employer may also file legal claims against you for breach of contract. It’s important to communicate and seek mutual agreement with your employer if you need to leave early, as not serving the full notice period can have legal and financial consequences.

Can My Employer Terminate My Employment Without Notice?

Yes, an employer can terminate your employment without notice under certain conditions, such as if you have committed a serious violation of company policy, fraud, or criminal activity. The specific grounds for immediate termination without notice are usually outlined in your contract or company policy. However, if your employer terminates you without cause, you may be entitled to compensation and gratuity.

What if I Face Arbitrary or Unfair Dismissal?

If you believe you have been unfairly or arbitrarily dismissed, you have the right to challenge the dismissal under UAE labour law. You can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) or seek legal advice. If the dismissal is deemed unfair, you may be entitled to compensation, including unpaid salaries, gratuity, and other benefits. Make sure to gather all documentation related to your case for support.