Major Legal Update – Can I resign after 6 months in limited contract in UAE
Can I resign after 6 months in a limited contract in the UAE
Following the most recent changes to the UAE Labour Law, the official Ministry of Human Resources and Emiratization will now only offer limited labor contracts. This is making many people ask some common questions, such as “can I resign after 6 months in a limited contract in the UAE?”. At the same time, many others wonder what are the legal conditions and privileges associated with the new law.
In this article, we will be explaining everything about the UAE’s new Labour Law regarding limited contracts. Below, you will find a full explanation for each of the following questions:
- What exactly is a limited contract in the UAE?
- Which conditions must apply for an employer to terminate a contract?
- What legal processes must the ending party take to discontinue a contract?
- When does the term of a limited contract expire?
- Are employees on a limited contract qualified for end-of-service remuneration?
- Can a worker with a limited contract resign?
- What is an online labor card in the UAE?
- How can Connect Legal help you with your contract resignation?
1. What exactly is a limited contract in the UAE?
A limited contract, as the name implies, is a type of employment agreement valid for a certain period of time. That period does not surpass 3 years. It begins and ends on the dates stated. However, it can be repeated or renewed by the employer. Businesses should always count on legal services to make sure everything is correct.
Following the new labor regulation, the private sector will now only be hiring staff under limited contracts. In the past, there was limited contract & unlimited contract. With that option, the contract of employment did not have an expiration date.
Now, a lot of people are wondering “can I resign after 6 months in a limited contract in the UAE?”. Since it has an expiring date, it is common to think that you are not able to leave until your contract says so, but that is not entirely true.
If both parties agree, a worker or employer can cancel a contract. They must serve the necessary notice period for the time specified in the contract. However, the time shall not surpass three months. Legal advice can help you operate lawfully.
2. Which conditions must apply for an employer to terminate a contract?
According to Article N. 120 of the UAE Labour Law, there are a few conditions for an employer under to fire a worker. Under a limited contract of employment, anyone ending the relationship must serve a notice period.
However, the new labor legislation lays out a few situations in which the employer can fire their workers without giving any notice time. Additionally, the best thing companies can do is hire legal services for their businesses. They can help you take action with the following situations:
- If the employee conducts document or identity forgery.
- When the worker causes the firm a significant financial loss.
- If an employee jeopardizes the company’s safety by disobeying orders.
- When the employee fails to meet their fundamental contract tasks despite formal reminders and warnings, they will be fired.
- In case an employee reveals any firm secrets.
- If an employee attacks a business employee.
- When the worker is discovered to be inebriated or drugged.
- If the worker is found guilty of breaking public morality by a court of law.
- In the event that a worker is absent for over 20 days in a row or 7 days in a row without a valid excuse.
There are several things to take into consideration if any of these situations happen. For instance, alcohol regulation is not just a working policy. In the UAE, alcohol is not taken lightly; being under the influence of alcohol is punishable.
On the other hand, when an employee stops showing up for work without an excuse will be considered absconding. This can be very troubling for the worker since it often implies a labor ban in the UAE. As you can see, absconding cases are a serious matter.
3. What legal processes must the ending party take to discontinue a contract?
Whether it is an employee or an employer, the party terminating a limited contract must follow a few steps. The limited contract & unlimited contract both have similar processes to follow. Firstly, they must notify the other of their intention to terminate the contract and fulfill the period of notice.
No more than three months are enough for the notice period. It should be agreed upon by both workers and management. If you are having a hard time getting into those terms, make sure to seek legal advice to help you resolve the situation.
Remember to keep your contractual commitments during the notice. In the event that these processes are not followed, the terminating party shall be held legally liable.
Now, since you were wondering “can I resign after 6 months in a limited contract in the UAE?” the truth is that you can. This is as long as you meet follow the lawful steps. Additionally, there is monetary compensation you will have to pay in case you resign.
3.1 Amount of compensation for terminating
When the ending party is an employer, they must compensate the opposing party. The number of compensations shall not surpass the equivalent of 3 months of gross wages. That includes salary and gratuity compensation.
The specific sum is a contractual agreement between parties. However, it can also be the amount of salary for the month that would be left in the contract. It will depend on which one is shorter. Legal services will help you both settle an agreement in which both parties feel comfortable.
However, when an employee cancels a contract for causes other than those stated in Article N. 121, the worker must reimburse the company for any loss suffered as a result. The employees must be aware of the implications of the new UAE Labor Law.
Unless otherwise specified in the contract, this sum of compensation can not exceed half a month’s pay for three months. Or the remaining length of the employment contract. Again, whichever is shorter, the legal services will determine the legal path.
4. When does the term of a limited contract expire?
To end a limited contract there are a few situations that can happen. Of course, the most common one is the natural expiring of the contract. It will depend on the dates specified in the agreement. This is one of the differences between a limited contract & unlimited contract, the second one does have an expiring date.
In case the term is not extended by the employer, then the contract has come to an end. The employer must then pay the end-of-service gratuity and all leave salary to conclude the employment relationship.
Additionally, both the employer and the employee can voluntarily agree to terminate it. Within the remaining time, and providing that all legal requirements are satisfied. We recommend making an appointment with a lawyer to give you legal advice before ending a contract.
Even when the contract has not naturally expired, many ask: “can I resign after 6 months in a limited contract in the UAE?” And the answer is yes. You can decide when to resign and follow all the steps. Giving notice is necessary when you are resigning unless the motive is employer violation of any of the 2022 UAE Labour Laws.
5. Are employees on a limited contract qualified for end-of-service remuneration?
In the previous UAE Labour Law, a worker on a limited contract only qualified for end-of-service gratuity if they fulfilled the contract term. Additionally, if the employee wants a contract termination they will only be considered for gratuity if they served for over 5 years.
Now, with the change in the Labour Law regulations, the limited contract can only be for 3 years. But if you are still asking yourself “can I resign after 6 months in a limited contract in the UAE?” The answer is: yes, additionally, workers who have operated for further than a year are eligible for end-of-service benefits in the UAE.
On the other hand, if workers have been working for less than a year, then they are not eligible for gratuity. However, approaching our employment lawyers or Labour Lawyers can be very helpful to understand what are all the possibilities for your specific case.
In addition, if you are not receiving the gratuity you are eligible for, you might want to consider filing a complaint regarding labor issues. It is important to report the misconduct of both employers and employees.
6. Can a worker with a limited contract resign?
Employees can cancel their contract of employment without notice under certain situations, as per the new law. For instance, when there are major shifts in job duties that are not in the contract of employment. However, you might still wonder “can I resign after 6 months in a limited contract in the UAE for other reasons?”
Make sure to fulfill the prior notice and follow the legal requirements outlined above. Sometimes it is best to seek legal advice prior to your resignation. Remember the notice period vary depending on your length of experience but should not surpass 3 months.
Although we have been answering this question throughout the article, it is important for us to ensure that it is crystal clear for everyone to understand.
Therefore, if you were searching for an answer to “can I resign after 6 months in a limited contract in the UAE? You should know it by now, but it is also important to know what type of post-termination restrictions you might face. The new Article 127 of the UAE Labour Law contemplates all the information you need.
7. What is an online labor card in the UAE?
If you are operating in the Emirates, you should become familiar with the contractual terms listed in your contract of employment. To prevent any inconvenience, you should always know your obligations and liberties.
In that way, questions like “can I resign after 6 months in a limited contract in the UAE” will be easily answered. And, if you do not have specifications of that kind in your employment contract, make sure to contact us to figure out your case.
Printing a copy of your employment offer every time you want to double-check a condition can be stressing. Additionally, carrying your physical copy is not a comfortable solution.
Luckily, you can access your labor card in the UAE online. There, you will be able to read any clause of your employment contract anytime you would like to. This is possible through the Ministry of Human Resources & Emiratization webpage. You must complete a few easy actions to check your labor contract online:
- Go to the official MOHRE or Tasheel websites.
- You will notice a ‘Labour Card Information’ option at the bottom of the page.
- Select the option that offers to go to the next page.
- Enter your information, including your labor card details, personal code, date of birth, and citizenship.
- When the system finds your details, it will take you to another page, where you may view your UAE employment contract online.
8. How can Connect Legal help you with your contract resignation?
As you can see, there are a few things to take into consideration before taking action to end a limited contract. You can resign after 6 months in a limited contract, but you must know everything Article 120 of the UAE Labour Law says about contract termination.
About Connect Legal
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If you still have questions related to this matter or any other legal issue you may be facing, we will be happy to guide you. Call one of our representatives at +971 43 316 688 or email our team at [email protected]. Do not hesitate to require any type of assistance from our consultants. We are at your service!
