Article 121 UAE Labour Law talks about the termination of contract and notice period of the employee

As of February 2nd, 2022, the United Arab Emirates has stated new regulations in its Labour Law. Especially, for the private sector. Therefore, these new guidelines regulate labour relations in the region. Likewise, this law talks about crucial difficulties in the employment relationship. For example, dismissal and notice period of the employee, are specified in Article 121 of the UAE Labour Law.

In this article, we will analyze Article 121 of the UAE Labour Law. Accordingly, we will talk about the termination and notice period of the local employees. It is important to note that employers must abide by these new guidelines. Let us observe:

1. What is employee dismissal?

2. What is the notice period for the employee?

3. Is it important to give notice to staff members?

4. What does Article 121 of the UAE Labour Law establish about the termination and notice period of the worker?

5. How can Connect Legal help you with your compliance?

1. What is employee dismissal?

Firstly, let us define dismissal. Termination or dismissal is a situation where the business owners decide to dismiss their staff members for a particular reason. In some regions of the Middle East, the UAE Labour Law is the legal entity that makes effective terminations. The termination process can be more or less challenging depending on the country.

Dismissing an employee happens when an employer decides to let go of a worker. When this decision is unilateral, it is usually called dismissal. As a result, when a business owner makes the decision to dismiss an employee, it means that they want to terminate the contract between the employee and the organization.

Similarly, it is very important to note that dismissal is not an agreement between two parties. It is a decision made by employers. Therefore, this is where Article 121 of the UAE Labour Law comes in handy. As it is the legal figure that makes sure that the employer does not disrespect the employee’s rights.

Termination of the employee can happen for a number of reasons. Subsequently, according to Article 121 of the UAE Labour Law, they can be:

• Disciplinary: due to inadequate conduct of the staff member in their workplace.
• Economic: this happens when the organization does not have enough economic resources to cover the workforce’s payroll.
• Performance: if an employee is performing poorly in their job role.
• Redundancy: this can happen when a business is closing or if there are fewer requirements for workers to perform a certain position.
• Statutory illegality: if it is illegal for a staff member to continue working within their job role.

However, dismissal can also happen for reasons that are not under the control of any of the two parties. These reasons can be:

• Fortuitous events.
• Death.
• Closure of the company, and others.

2. What is the notice period for the employee?

The employee notice period is when the terminating party notifies the other about the termination of the employment relationship. Noticing employees is crucial when ending a contract. In this way, they can have enough time to look for new job opportunities or, on the other hand, for employers to find a candidate to fill the new vacancy.

Similarly, the reason for the notice period is to avoid any legal discrepancy with the new UAE Labour Law. Therefore, with by noticing the termination of the contract, the involved parties have time to find replacements, either an employee or an employer. In the same way, businesses can keep their legal compliance by making sure that there is a notice period in place.

Noticing is a legal right that staff members and employers have. Consequently, if one of the parties does not respect this legal right, they can request fair compensation. If you want to know more about legal compensation, you can get in touch with one of our labour lawyers in the United Arab Emirates.

In summary, what this new Article 121 of the UAE Labour Law seeks is that none of the parties are taken by surprise by the termination of the contract. Subsequently, abiding by the government’s guidelines and regulations will allow companies to last longer in the business market. While employees can avoid legal issues with their former employers.

3. Is it important to give notice to staff members?

Yes, it is very important to give notice to staff members about their dismissal with time. The period of notice for termination of contract varies from the conditions and clauses that appear in said contract. However, in some regions, it depends on the seniority of the employee. Nevertheless, in some Middle Eastern areas, the UAE Labour Law establishes it.

If you look at it from both points of view, it is essential for employers and employees to give a grace period after noticing the termination of the contract. The importance of giving notice lies in that business owners can have a comprehensive period to find the necessary talent to fill this new vacancy. On the other hand, it is vital for staff members to have time to find another source of income.

Another important thing is that, by giving notice, both parties are free from having to pay a certain compensation amount to the counterparty that this decision is affecting. The noticing period must be the same for staff members and employers alike. In this way, they can have the same number of days to fulfill their particular needs.

In addition, in case one of the parties does not notice the termination of the contract within the time that the new UAE Labour Law estates, they will have to compensate the other party with the same amount of money. It does not matter if it is an employer or employee breaking this law.

4. What does Article 121 of the UAE Labour Law establish about the termination and notice period of the worker?

This current year, the United Arab Emirates government is starting to implement some changes to the UAE Labour Law. Therefore, it is essential that businesses know about these new changes. Especially, about the reformations of Article 121 of the UAE Labour Law. Thus, they can apply it correctly in their workspace.

With these new modifications, business owners must look for ways to adapt their companies to this new legal framework. Managers must analyze and start implementing the right strategies to keep compliance in place. We know that trying to keep up with changes can be exhausting for both new and old businesses. Therefore, to help you understand Article 121 of the UAE Labour Law, we offer you the support of our lawyers. They will help you apply these new regulations and keep your business compliancy.

The government added numerous new regulations and guidelines to the new UAE Labour Law. However, here, we will focus on Article 121 of the UAE Labour Law. These are the changes it entails:

4.1 Notice periods for termination of the contract

The talent flow in any company can be very dynamic. Subsequently, just as new employees can enter, they can also decide to leave the business. In this way, organizations should be legally ready to go through these new issues that may happen. Therefore, this is why the government is presenting Article 121 of the UAE Labour Law.

Firstly, the new UAE Labour Law establishes that the minimum notice period for termination of a contract stays at 30 days. However, it institutes that the maximum notice period is now 90 days. In addition, Article 121 of the UAE Labour Law establishes that there also must be a minimum notice period to end current open-ended contracts. Especially, before starting new fixed-term contracts.

Likewise, the length of notice will be according to how long the staff member has been working in the organization. If the worker has been working for a business for up to 5 years, then the period of notice should be at least 30 days.

On the other hand, according to Article 121 of the UAE Labour Law, if the employee has been working for more than 5 years but less than 10, then the advance notice must be of at least 60 days. In the same way, if the employee has been in the company for more than 10 years, then it must be of 90 days.

Similarly, if the staff member chooses to stop working without giving proper notice, then they must pay the employer an indemnity equivalent to their salary for the notice period. The same goes for an employer that dismisses a worker without the proper notice period.

4.2 Termination of the contract

Article 121 of the UAE Labour Law states that the termination of the employment relationship by dismissal is a fair cause for ending an employment contract. It is an important change since the previous UAE Labour Law did not specify anything about it.

The reason for this change was that it is not ideal to force either party to stay in a contractual relationship. Particularly if they did not want to be in it anymore. Additionally, the new UAE Labour Law states that fixed-term employment contracts can be finished by notice for a reasonable reason. Therefore, now workers can claim dismissal as the reason to terminate their employment contracts.

Likewise, parties can claim dismissal for different reasons, such as:

• Job performance.
• Employee’s conduct.
• Employer’s insolvency or bankruptcy.
• Abuse of power.
• Breach of contract.

Also, dismissal can happen for economic reasons. For example, if the business owner cannot cover an employee’s payroll or cannot keep offering their services and products to their clients.

4.3 Job-search leave

Article 121 of the UAE Labour Law introduces the new concept of job-search leave. This new notion allows employees to have a weekly day off during their notice period. This is in lieu of giving them time to search for a new job.

Losing a job is not an easy situation for anyone. Consequently, Article 121 of the UAE Labour Law helps regulate this situation. The government’s objective with this new UAE Labour Law is to protect all workers, so they can have the right to a stable job at all times.

In summary, the new UAE Labour Law protects staff members and business owners alike. Giving them new regulations and guidelines to keep the termination of the contract more transparent. Stating the fair causes for termination of the contract and establishing a reasonable notice period that can benefit both parties.

5. How can Connect Legal help you with your compliance?

It is important that companies understand the severity of keeping their compliance with the UAE Labour Law. Therefore, to help them abide by Article 121 of the UAE Labour Law, they must have a legal team by their side. With the right legal advice, you can easily keep your company in place and follow any regulation.

To give you the most professional support, Connect Legal will help you update your company’s guidelines so it can comply with the new and old laws. Especially those related to termination and notice period of the employee. We have decades working alongside companies and individuals, helping them resolve their legal issues in the UAE.

Do you want to terminate an employee’s contract and do not know how to legally apply this procedure? 

Do not worry, leave this and other legal matters in our capable hands. We will give you access to the most qualified legal advisors in the area to resolve this and other challenges your company may be going through. You can get in touch with us by calling us at +971 43 316 588. Or you can send us an email at [email protected].

Plus, if you are looking for a job after the termination of your contract, we have the solution for you. The Talent Point is the place where employers and job-seekers meet to satisfy each other’s needs. If you are job-searching in the UAE, you can go to thetalentpoint.com and look for the perfect position that matches your qualifications. Or, if you are an employer, you can register and post your vacancy there. If you want to know more do not hesitate to write to [email protected].