Termination Requirements
Under UAE Labor Law, a minimum notice period of 30 days is mandatory for terminating an employment contract, whether initiated by the employer or the employee. This notice must be given in writing and can be either worked or paid in lieu.
Notice Period
For employees working under the DIFC Employment Law, the required notice period depends on the length of continuous service:
- Less than 3 months: 7 days’ notice
- 3 months to less than 5 years: 30 days’ notice
- 5 years or more: 90 days’ notice
Severance Pay
Employees in the UAE are entitled to end-of-service gratuity (severance pay) upon completing at least one year of continuous service. Gratuity Calculation:
- For the first five years of service:
- 21 days’ basic wage per year.
- For each year beyond five years:
- 30 days’ basic wage per year.
Any partial year is calculated pro rata.
The gratuity is based on the last drawn basic salary, excluding allowances (e.g., housing, transport).
The total gratuity cannot exceed two years’ total salary for expatriate employees
Unemployment Insurance
To qualify for unemployment compensation, employees must meet four main conditions:
- Must have been subscribed to the unemployment insurance system for at least 12 consecutive months.
- Job loss must not be due to disciplinary action under UAE labor laws.
- Claims must not be fraudulent or based on fictitious employment.
- Payments stop if the individual secures new employment during the compensation period.
Compensation Structure
- Compensation is 60% of the employee’s basic salary.
- Maximum of AED 20,000 per month.
- Duration is up to 3 months from the date of unemployment.
- Total coverage is capped at 12 months over the course of an individual’s employment in the UAE