Latest news with #MinistryofHumanResources&Emiritisation
Khaleej Times
13-04-2025
- Business
- Khaleej Times
UAE: Can employees ask for a severance package in their job contract?
Question: I am planning to move to the UAE this summer and have been exploring job opportunities. However, none of my potential employers I've spoken to were willing to offer a severance package. I'd like to understand if there are any laws or regulations about this. Is it possible to include a "golden handshake" clause in my job contract? And if I do, will it be legally binding? Answer: It is assumed that you are considering an employment offer from a company based in the UAE mainland. In that case, the UAE Employment Law, along with related cabinet resolutions and the Civil Transactions Law, would apply to your situation. In the UAE, an employee who has completed at least one year of continuous service is entitled to severance pay at the end of his or her service with an employer. The severance pay of an employee is calculated on his or her basic salary. This is in accordance with the Article 51(2) of the Federal Decree Law no. 33 of 2021 Regarding the Regulation of Employment Relationships and its amendments ('UAE Employment Law'), which states: 'The full-time foreign employee, who completed a year or more in continuous service, shall be entitled to end-of-service benefits at the end of his service, calculated according to the basic salary as per the following: a. A salary of (21) twenty-one days for each year of the first five years of service; b. A salary of (30) thirty days for each year exceeding such period.' Further, the Article 8 of the UAE Employment Law read with Article 10 (1) of the Cabinet Resolution No. 1 of 2022 on the Implementation of Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relations (the 'Cabinet Resolution No. 1 of 2022'), states the regular terms and conditions which needs to be included in an employment contract of an employee. In the UAE, the parties to any contract are legally bound to carry out their respective obligations as stated in the contract, and to do so honestly, fairly, and in good faith. This is in accordance with accordance with Article 246 (1) of the Federal Law No. (5) of 1985 On the Civil Transactions Law of the United Arab Emirates, which states: '1. The contract shall be implemented, according to the provisions contained therein and, in a manner, consistent with the requirements of good faith.' Generally, in the UAE, the Ministry of Human Resources & Emiritisation (Mohre) template of the employment offer letter and contract does not contain clause related to severance pay. However, you may request your prospective employer to include the same. If your prospective employer does not agree to include details about severance pay in your employment offer letter, or if the offer letter and employment contract do not mention it, you will still be entitled to receive severance pay when your employment ends, as long as you have completed at least one year of service with the company. As an employee, you are entitled to all the benefits outlined in the UAE Employment Law and its related cabinet resolutions, including severance pay as specified in Article 51(2) of the UAE Employment Law. Additionally, while the UAE Employment Law ensures the protection of employee rights, it does not restrict employers from offering more favourable terms. This is in line with Article 65 (1) of the Employment Law, which states: 'Rights laid down in this decree-law shall consist the minimum employees' rights. The provisions of this Decree-Law shall not prejudice any of the rights prescribed for employees under any other legislation, agreement, declaration, regulation or employment contract, giving rise to rights that are more beneficial than those laid down in the provisions of this Decree-Law.' If you're considering including a 'golden handshake' clause in your employment contract, you can discuss this with your prospective employer and mutually agree to add it to the contract. Applicable laws: 1. Federal Decree Law no. 33 of 2021 Regarding the Regulation of Employment Relationships and its amendments 2. Cabinet Resolution No. 1 of 2022 on the Implementation of Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relations 3. Federal Law No. (5) of 1985 On the Civil Transactions Law of the United Arab Emirates
Khaleej Times
09-03-2025
- Business
- Khaleej Times
UAE jobs: Can employees be asked to serve 3-month notice period after resignation?
Question: I work in a mainland Dubai-based company and my question is about the mandatory notice period that employees have to serve after resigning. My company requires employees to give a three-month notice. Is this legal? What does the UAE Labour Law say about this? What happens if I tell my boss that I can serve only one month? Answer: In the UAE, an employer or an employee who intends to terminate an employment contract must serve the stipulated notice period mentioned in an employment contract. This is in accordance with Article 43(1) of the Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations, which states: '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 (90) ninety days.' Furthermore, both an employer and an employee, while terminating an employment contract may agree to reduce 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: 'Employment Contract shall continue in force throughout the Notice Period and expires 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 of the parties fails to follow the required notice period before terminating an employment contract, then the defaulting party must pay the other party compensation which is known as "pay in lieu of notice '. 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 as pay in lieu of notice, 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, you have to verify your employment contract registered with the Ministry of Human Resources & Emiritisation (MoHRE) related to your notice period to be served for terminating your employment with your employer. You need to serve a notice period while resigning as per the notice period mentioned in your employment contract registered with MoHRE. In the event your employer contract states you need to serve 3 months to the employer for you terminate the employment contract, then you are obligated to serve 3 months of notice period. However, if the notice period mentioned in your employment contract is less than 3 months, then there is no requirement to serve 3 months of notice to your employer and instead, you may only serve the stipulated notice period as stated in your employment contract. Furthermore, you may also mutually agree with your employer regarding the notice period to be served for termination of your employment contract. Additionally, if you intend to reduce your notice period then you may have to compensate your employer with payment in lieu of the notice period not served by you. If your employer insists on a notice period which is not as per your employment contract, you may consider filing an employment complaint against your employer with the MoHRE.
