Question: Could you explain how the one-month notice period works under UAE labour law? If an employee is unable to serve the full notice period, what are the possible legal or financial consequences?
Answer: Pursuant to your queries, it is assumed that an employee is employed by an employer based in the mainland of Dubai; hence, the provisions of the UAE Employment Law are applicable.
In the UAE, an employer or an employee who intends to terminate an employment contract must serve the stipulated notice period as mentioned in an employment contract.
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This is in accordance with Article 43(1) of the Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations (the ‘Employment Law’), which states, ‘A party to an employment contract may terminate the contract for good cause by giving the other a notice in writing.’ The employee shall perform his duties during the notice period agreed upon in the contract, provided the notice period is not less than (30) thirty days and not in excess of (90) ninety days.”
Article 1 of the Employment Law defines “notice period” as “the notice period specified in the employment contract, which requires both parties to the contract to abide by it in case either of them wishes to terminate the employment contract.”
Further, both parties to an employment contract, while terminating an employment contract, may mutually agree to reduce or waive the notice period. However, the rights of an employee, including his or her salary pertaining to the notice period, need to be paid by an employer.
This is in accordance with Article 43(2) of the Employment Law, which states, “An employment contract shall continue in force throughout the notice period and expire with the expiry of the notice period. The employee shall be entitled to his full salary for such period on the basis of his last salary and shall perform his work if the employer so requests. The parties may agree to waive the notice clause or shorten the notice period, provided that the employee reserves all his entitlements due to the notice period agreed upon in the employment contract. The notice period shall be equal for both parties unless the same is in the interest of the employee.”
If one party (either an employer or an employee) fails to follow the required notice period before ending a contract, they must pay the other party compensation equal to the salary of an employee for the full notice period or remaining part.
This compensation is called the “notice period allowance”. This is in accordance with Article 43(3) of the Employment Law, which states, “The party who did not abide by the notice period shall pay to the other party compensation, which is called notice period allowance, even if the absence of notification does not cause damage to the other party, and the compensation shall be equal to the worker’s wage for the full notice period or the remaining part thereof.”
In accordance with the aforementioned provisions of the law, an employer or an employee who intends to terminate an employment contract must serve the stipulated notice period as mentioned in an employment contract, and any reduction in the duration of the notice period requires mutual agreement between both parties. Further, if one party (either an employer or an employee) fails to follow the required notice period before ending a contract, they must pay the other party compensation.
For further clarifications on this matter, please contact the Ministry of Human Resources and Emiratisation or a legal counsel in the UAE.
Ashish Mehta is the founder and managing partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.
Source: Khaleej Times