Choosing the right type of contract at the beginning of an employment relationship is important to mitigate the risk. Do you know the types of contracts available and the main differences? In the case of contracts of indefinite duration, an employment relationship is terminated in one of the following cases: unless otherwise provided for in the employment contract, if the employee wishes to terminate the fixed-term contract before the end of the period, the United Arab Emirates Labour Code obliges him to pay the employer an « early severance pay » in the amount of half of three months` salary, including salary and allowances or half of the remuneration for the remaining period, if the duration of the contract is less than three months. Each party may terminate the original contract or a contract renewed individually, provided that it takes into account the legal consequences of early termination, including: As the name suggests, a fixed-term contract is a type of employment contract valid for a short period. In the case of contracts of indefinite duration, an employment relationship is terminated if the employer and the employee mutually agree to terminate the contract or if one of the parties decides to terminate the contract, provided that the terminating party complies with the legal obligations of termination and continues to comply with its obligations. In some situations, an employer or employee may terminate an employment contract without notice. Arbitrary dismissal occurs when an employer dismisses or forces an employee to dismiss the employee without just cause. Although employment contracts of indefinite duration are to be replaced by fixed-term employment contracts, the new Labour Law provides for rather unusual minimum notice periods for the termination of contracts of indefinite duration, depending on the seniority of the employee, depending on the seniority of the employee: (i) 30 days if the seniority of the employee is less than five years; (ii) 60 days if the worker`s period of service exceeds five years; and (iii) 90 days if the period of service is longer than 10 years. Fixed-term contracts generally do not have a termination clause and simply expire at the end of the term or on the date specified in the contract (unless terminated early by one of the parties – see answers to questions 5 and 6 below). 2. Update the standard employment contracts to take into account the requirement that all workers must be issued fixed-term employment contracts of up to three years` duration. An employee may terminate the contract by notifying the employer of the contractual notice period (which, according to the employment contract, must be at least 30 calendar days or more). If an employee withdraws from a contract of indefinite duration, he is entitled to severance pay on the following sliding scale: A summary dismissal by the employer is allowed on the basis of one of the 11 exhaustive grounds under Articles 88 and 120 of the UAE Labour Code.
An employee may effectively terminate the contract before the expiry of the contract in accordance with the provisions of Article 121 of the Act. Employees are entitled to five days of paid leave for the death of their spouse and three days of paid leave for the death of a parent, child, sibling, grandchild or grandparent. There is no qualifying service requirement. 3. Ensure that all existing workers employed on permanent contracts are placed on fixed-term contracts by February at the latest. . . .