Terminated in UAE? Here’s Exactly What You’re Entitled To (2026)

Whether you’ve just been let go, are thinking about quitting, or are an employer navigating a difficult situation — understanding termination law in the UAE is not optional. Get it wrong and you’re looking at MOHRE complaints, compensation claims, or a labour ban.

This guide breaks down UAE Federal Decree Law No. 33 of 2021 in plain language — covering when termination is legal, what you’re owed, what counts as arbitrary dismissal, and what happens to your visa and work permit after.

2026 Update: The base law — Federal Decree-Law No. 33 of 2021 — remains in effect but has been amended three times: FDL 14/2022, FDL 20/2023, and most recently FDL 9/2024, which introduced penalties of up to AED 1,000,000 for serious violations. All information in this guide reflects the law as currently enforced in 2026.

• When can termination happen
• What happens if the contract is terminated without notice 
• What is arbitrary dismissal
• Opportunities for changing jobs after termination

Straight to the point now. 

When Can Termination Happen

The first question to arise is under which circumstances can the employer or the employee terminate the employment contract. 

Article 42 of the UAE Labor Law lists nine situations where an employment contract can legally end. These apply to both employers and employees — and cover everything from natural expiry to bankruptcy. Here’s what each one means for you:

• The employment contract has expired and has not been renewed or extended. 
• On mutual account 
• If either party wishes to terminate it, the terminating party follows the provisions for termination mentioned in the contract and the notice period mentioned in it.
• If the employer is dead (on the account that the contract’s subject is related to the entity)
• On account of an employee’s death or permanent inability to work, proven by a medical certificate issued by a medical entity 
• If the worker is facing a freedom-restricting penalty resulting from the court’s final judgments for three months or more. 
• The establishment closed permanently in accordance with the UAE legislation.
• The project cannot be continued in the event of the employer’s bankruptcy, insolvency, or economic or exceptional reasons.
• The worker is unable to fulfill the requirements for renewing the work permit for reasons beyond the employer’s control.

Important: If your termination doesn’t fall under any of these nine grounds, it may qualify as an arbitrary dismissal — which entitles you to compensation. See the section below.

Note for 2026: All UAE private sector employment contracts must now be fixed-term. The deadline for converting unlimited contracts passed in December 2025. Termination rules apply equally regardless of the original contract type.

What the Law Has to Say About Notice Period 

Article 43 also provides information on the notice period and process of termination. According to the article, either party can terminate the employment contract for a legitimate reason. In order to terminate, they:

• Must give a written notice to the other party 
• Serve a notice period of 1 month to 3 months, as mentioned in the employment contract.

Notice Period	When It Applies
Minimum 30 days	Standard minimum under UAE Labour Law
Up to 90 days	As specified in the employment contract
Notice period allowance	Paid if either party skips the notice
1 day unpaid leave/week	Granted to employee to job search during notice

Some of the other aspects that need to be followed are:

• Both parties should perform the work as outlined in the employment contract during the notice period. 
• The worker will receive full pay during the period.
• In case a party fails to serve the notice period, they will have to pay a ‘notice period allowance’ to the other party. This allowance is equal to the worker’s wage for the notice period or in proportion to the remaining period. It is calculated based on the last drawn wage. 
• If the employer terminates the contract, the worker is allowed one day of unpaid leave per week to search for another job. 

What Happens If The Contract Is Terminated Without Notice 

In some instances, you may want to terminate the contract without notice. The UAE government recognizes it and allows it to. However, for either party to terminate the contract without notice, there are some grounds to be met. Take a look below.

For Employers

Article 44 allows employers to terminate the employee’s contract without notice in case of:

• False identity 
• Submission of forged documents and certificates 
• Causing an error leading to substantial loss
• Deliberate attempt to damage the employer’s property and acknowledge it. In this case, the employer has to report the incident to MOHRE within seven working days from the date of knowing about it.
• Violation of safety instructions (provided that these instructions were made clear to the employee either via writing or verbally informed to an illiterate employee)
• Failure to perform basic duties as per contract and violation of duties after two warnings of dismissal
• Divulging secrets which led to losses, missed opportunities, or personal benefit.
• Found drunk or under the influence of a prohibited substance
• Engaged in an act that breaches public morals
• Assaults anyone at the workplace 
• Absenteeism without lawful excuse for 20+ intermittent days or 7+ successive days in a year 
• Exploits their position for personal gains
• Joins another organization without following the regulations laid down in this regard 

The employer has to conduct a written investigation of the worker. Only after completing this process can the employer lawfully terminate the contract without notice. Additionally, the dismissal notice has to be written, justified, and duly handed to the employee. 

Employer obligation: Before terminating without notice, the employer must complete a formal written investigation. Skipping this step makes the termination legally invalid — regardless of the grounds cited.

2026 Penalty Update: Employers who fail to settle termination entitlements — notice pay, gratuity, or unpaid dues — face fines between AED 100,000 and AED 1,000,000 under the 2024 amendments, multiplied per worker affected.

For Employees

Similarly, Article 45 allows employees to terminate without notice on predetermined grounds. There are:

• Employers fail to meet contractual or legal obligations. In this case, the employee has to notify the MOHRE 14 days in advance from the date of quitting. If the employer fails to rectify the breach despite MOHRE’s notice, the employee can be terminated. 
• Employees experience assault or harassment. Again, the employee has to inform a competent authority and MOHRE within 5 days of the date of the report. 
• Instructed the worker to perform tasks not specific in the contract without the worker’s written consent. This ground does not apply to situations where the task is fundamentally required. 
• The employer has failed to remove factors that threaten the employee’s safety and health despite being aware of them. 

Employee obligation: For most Article 45 grounds, you must notify MOHRE before quitting. Leaving without following this process may result in a “work abandonment” report being filed against you.

What Is Arbitrary Dismissal

In some cases, the employers may also terminate employees for filing a complaint to the MOHRE or a lawsuit against them. In such cases, if the validity of the complaint is established, the termination is illegal as per Article 47 of the labor law.

Moreover, if the employees feel that they have been dismissed illegally, they can file a complaint to the MOHRE. The MOHRE will then try to solve the matter amicably. If the matter is not resolved amicably, MOHRE now holds binding decision-making authority for disputes up to AED 50,000 (introduced under the 2024 amendments). MOHRE’s decision is enforceable within 14 days without court proceedings. Disputes exceeding AED 50,000 are referred to a competent court.

The compensation is determined after factoring in multiple elements like:

• Type of work
• Extent of damage
• Employment duration

Regardless of this, the compensation cannot exceed the employee’s total wage for 3 months. Additionally, the employee can claim gratuity benefits, notice period dues, or any other unpaid dues for which they are eligible. 

What Happens to Your Gratuity If You’re Terminated?

Your end-of-service gratuity entitlement depends on how the contract ends — not just that it ends.

Gratuity is calculated at 21 days’ basic wage per year for the first 5 years, and 30 days’ basic wage per year thereafter. It is based on your last drawn basic salary.

Opportunities For Changing Jobs After Termination

The contract was terminated. The pending process was completed. Dues were paid off. What’s next? Another role, maybe. Here’s what the law has to say. 

Article 27 states that you are free to work for another employer or get a new work permit after the termination of the contract or expiry and non-extension of the employer contract if:

• Your contract has expired and is not renewed
• The termination has taken place as per Articles 42 and 45 of the UAE Labor Law

If the contract gets terminated or expires, you get a grace period after cancellation, during which you can either:

• Obtain a new work permit and residency
• Leave the country 

The UAE is very strict with its laws for illegal residents. 

However, you may not be eligible for a new work permit for one year from your departure date under Article 8 of Ministerial Resolution No. 47 of 2022 Regarding the Settlement of Labour Disputes and Complaints Procedures. There are two conditions for this:

• Employee terminated the contract during the probation period, and the employer has not breached their contractual obligation. 

OR

• The ‘work abandonment’ report against the employee was found true. 

This one-year restriction is commonly referred to as a labour ban in the UAE. It applies specifically when you resign during probation (without employer breach) or when a work abandonment report is confirmed. If neither condition applies to you, there is no labour ban and you can switch jobs or obtain a new work permit immediately after your visa grace period.

Frequently Asked Questions About Termination in UAE

Q: Can my employer terminate me without giving a reason?

No. Under UAE Labour Law, termination must be for a legitimate reason. If no valid reason is given, it qualifies as arbitrary dismissal and you are entitled to compensation.

Q: How much compensation do I get for arbitrary dismissal?

The court determines compensation based on your role, length of service, and extent of damage — but it cannot exceed 3 months of your total wage. You can also claim gratuity and any unpaid dues separately.

Q: What is the minimum notice period in UAE?

The minimum is 30 days. Your contract may specify up to 90 days. If the notice is not served, the terminating party must pay a notice period allowance equivalent to the wages for the remaining period.

Q: Can I be terminated during probation in UAE?

Yes. Either party can terminate during probation, typically with a 14-day notice. If the employee resigns during probation without cause, a one-year work permit ban may apply.

Q: What happens to my visa after termination?

After your visa is cancelled, you receive a grace period to either secure a new work permit and residency or leave the country. Overstaying this grace period violates UAE immigration law.

Q: Can I file a complaint if I think my termination was unfair?

Yes. File a complaint with MOHRE. They will attempt an amicable resolution first. For disputes up to AED 50,000, MOHRE can now issue a binding decision enforceable within 14 days. Larger disputes are referred to a competent court.

Conclusion

Termination in the UAE is heavily regulated — which works in your favour as long as you know the rules. Whether you’re an employer ensuring compliance or an employee protecting your rights, getting the process wrong has real financial and legal consequences.

HRSG helps UAE businesses stay fully compliant with labour law — from employment contracts and notice period management to MOHRE filings and end-of-service calculations. If you’re navigating a complex termination situation, speak to our HR advisory team today.