As per the UAE Labour Law, a limited contract is a legally-binding agreement that is signed between an employer and an employee for a specified period. The duration can range from a few months to a maximum of five years, and both parties are required to fulfill their respective obligations during that period. However, situations may arise where the contract may have to be terminated before its expiry date.
If you find yourself in such a situation, it is essential to understand the legal procedures involved in terminating a limited contract in the UAE. The process of early termination of a limited contract depends on the reasons for the termination, and there are different procedures to be followed according to the law.
The UAE Labour Law allows for early termination of a limited contract under certain circumstances, which include:
1. Mutual consent of both parties: In this case, both the employee and employer agree to terminate the contract before its expiry date. This termination must be done in writing, and both parties must sign the agreement.
2. Employee resignation: An employee can terminate a limited contract if they choose to resign. The employee must provide the employer with a notice period of at least 30 days, as per the law.
3. Termination by the employer: An employer can terminate a limited contract if the employee violates the terms of the contract or is found to have committed gross misconduct. In this case, the employer must provide the employee with a notice period of at least 30 days.
4. Termination due to unforeseen circumstances: The UAE Labour Law allows for the termination of a limited contract if there are unforeseen circumstances beyond the control of either party. This includes situations like force majeure or bankruptcy of the employer.
It is important to note that if the contract is terminated without a valid reason or without following proper procedures, the party responsible for the termination may be liable for paying compensation to the other party.
In case of any dispute related to early termination of a limited contract, both parties can approach the Ministry of Human Resources and Emiratisation for resolution. The ministry will investigate the dispute and determine the appropriate compensation, if any, that is to be paid by either party.
In conclusion, early termination of a limited contract in the UAE should be done with caution, adhering to the legal procedures outlined by the UAE Labour Law. Both parties should act in good faith and cooperate in resolving any disputes that may arise. Understanding the rights and obligations of both the employer and employee is crucial in ensuring the termination of a limited contract is smooth and error-free.