In accordance with the Labour Law if the employee, who is under a contract for unlimited period, wished to submit his resignation from work, in this case, he shall give notice to the employer on the same and shall work within such period if so required by the employer, i.e. the Labour Law obliges the employee to work within such period and the latter is not entitled to refrain from working within such period, otherwise he will be contrary to Labour Law and be subject to penalty, but he may immediately leave work if the employer allowed him to do so. The contract shall remain in force until the end of the notice period in accordance with the article no. 118 of the Federal Labour Law no. 8 of 1980. As per the law, notice period is one month and may be agreed to increase the same and may not decrease it. Finally, in according to the Ministry of Labour's decisions now applicable, if the employee has completed two years with the existing employer, he may work with a new sponsor without a need for No Objection Certificate from the existing sponsor.
Frequently Asked Questions
30 day notice period must for resigning
Q: I have been working as an auditor for a private company under an unlimited contract. Now I've got a better job and I've given the resignation but the company says that I have to give a minimum of three months' notice as per the offer letter I had signed while joining the firm. There is nothing mentioned about the notice period in the original labour contract which is registered at the Labour Department. Please tell me whether the 30-day notice period is required in my case.A: Both an employer and employee are entitled, as per Article 117 of the labour law, to terminate the unlimited contract of employment any time, yet with legal and acceptable reasons. However, both parties (employer and employee) are bound to notify each other in writing (notice) at least 30 days before ending their labour relationship, either by termination or resignation.
Such a notice period is an indispensable term whether it is stipulated in the contract of employment or not. In other words, no matter this condition is mentioned in the contract or not, it is applicable and guaranteed by law to protect the rights of both parties.
Reducing notice period against contract
Q: I am working in a company and my labour contract is for three years. My contract is unlimited and I have already completed two years of service. In my contract, it is said that I have to give a three-month notice period before resigning. I am planning to quit. Is it possible to give a one-month notice period? If not, what are the consequences?
A: The established principles of law in the UAE are that the contracting parties must observe all the provisions of the relevant contract and must fulfil their obligations accordingly. Since three months' prior notice is mentioned in your employment contract, as per the UAE Labour Law, you must give three-month prior notice for resigning the job. Otherwise, you will be held responsible for compensation in lieu of notice as per Article 119 of the UAE Labour Law.
According to the article, 'If the employer or the employee has failed to serve notice to the other party for termination of the contract or has reduced the notice period, the party obliged to serve the notice shall pay to the other party an indemnity called 'Compensation in lieu of notice', and the indemnity shall be equal to the employee's pay for the notice period in full or in proportion to the diminished part'.
Compensation for not serving notice period
Q: I have been working at an entity based at the Jebel Ali Free Zone (JAFZ) in Dubai for the last 20 months. I submitted my resignation on a notice period of 15 days instead of the required 30 days, as I had to return to my home country urgently. The company had sent me for offshore field service jobs and also gave me some training during this period. The company has asked me to repay the money it spent on my visa and training, along with 45 days' full salary, to proceed with the cancellation process. Do I have to pay the money?
A: You have not mentioned about the nature of your employment contract as to whether the same is of limited or unlimited duration. And therefore, our response is based on your working on an unlimited period employment contract vis-a-vis limited period employment contract. In accordance with the labour regulations applicable at the JAFZ, the presence of a written contract drawn on JAFZA template signifies the existence of a limited period contract. Otherwise, it is presumed that the employer and the employee have an unlimited period contract between them. Owing to this, the rules pertaining to termination of employment will follow the provisions of the Federal Law No 8 of 1980 on the Regulation of Labour Relations (the 'Labour Law').
In view of the foregoing, if your employment contract is of unlimited duration, then you are within your rights to terminate your employment by giving a prior notice of 30 days. This is in accordance with Article 117 of the Labour Law which states:
(1) Both the employer and the worker may terminate a contract of employment of unlimited duration for a valid reason at any time following its conclusion by giving the other party notice in writing at least 30 days before the termination.
However, it may also be noted that if the employee fails to give proper notice of termination or reduces the period of notice, then he shall be liable to compensate his employer for the number of days so reduced. This is in accordance with Article 119 of the Labour Law which states:
'Where an employer or a worker fails to give the other party notice of the termination of the contract or reduces the period of notice, the party obliged to give notice shall pay the other party compensation, called 'compensation in lieu of notice' even where no prejudice has been sustained by the other party as a result of such failure or reduction. The said compensation shall be equal to the worker's remuneration in respect of the entire period of notice or the time by which it was reduced. Compensation in lieu of notice shall be calculated on the basis of the remuneration last received, the case of worker remunerated on a monthly, weekly, daily or hourly basis or in the case of a worker remunerated at piece rates, on the basis of the average daily remuneration referred to in article 57 of this Law.'
Pursuant to the foregoing, if you were employed under an unlimited period contract, and you had given a prior notice of 15 days instead of the required 30 days, then you shall be liable to compensate your employer for the reduced period of notice that is, your salary for 15 days calculated on the basis of your last drawn full salary.
If however, your employment was of limited duration, you will be liable to compensate your employer with an amount equal to your 45 days' remuneration. This is in accordance with Article 116 of the Labour Law which states:
'Where a contract is revoked by the worker for reasons other than those specified in Article (121), he shall be required to compensate the employer for any damage the latter sustains as a result, provided that the amount of compensation shall not exceed half a month wage for three months or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.'
In view of this, you may be required to compensate your employer for an amount, which is equal to your salary for 45 days.
Further, you are not required to repay your employer for the cost of your employment visa, as this is against the laws of the UAE. The issue of repayment of training expenses will depend on the applicable regulations in JAFZ and also in accordance with the specific tewrms in your employment contract with respect to training.
In view of the foregoing, you may try and prevail upon your employer to cancel your visa in accordance with the law. However, if you and your employer fail to settle the matter amicably, in accordance with the provisions of law, you may consider to approach the relevant section at Jebel Ali Free Zone Authority, which deals with the disputes between the employers and employees.
Employer cannot recover Visa renewal cost
Q: I have been working in a foodstuff trading company since 1998. My residence visa was renewed in February 2012, but my labour card is expiring in February 2013 and my job contract is unlimited. Recently, due to some health problems of my father in India, I was unable to continue my work in Dubai, and hence submitted my resignation giving a 30-day notice period, which the company has accepted. I wish to cancel my visa and travel back to India. But the company told me they would impose a one-year ban and recover my salary for 45 days towards my visa renewal charges. Is this legal?
A: It is not legal for your employer to recover the visa's cost if you have given 30-day prior notice unless otherwise provided in your employment contract.
Under UAE laws, if an employee leaves a job without completing two years, then the Ministry of Labour will impose a work ban for six months or for one year if it is imposed by the company and during that time, the individual is not allowed to work in the UAE. Both these situations are not applicable to you as you have completed 14 years in the same company. Furthermore, a work ban is not applicable if the current or new employer is based in a free zone in Dubai.
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Compensation in lieu of notice
As per Federal Labour Law No. 8 of 1980, Article No. 119: 'Where an employer or a worker fails to give the party notice of the termination of the contract or reduces the period of notice, the party obliged to give notice shall pay the other party 'compensation in lieu of notice', as a result of such failure or reduction. The compensation shall be equal to the wage of the worker’s remuneration in respect of the entire period of notice or the time by which it was reduced. 'Compensation in lieu of notice' shall be calculated on the basis of the remuneration last received, in the case of worker remunerated on a monthly, weekly, daily or hourly basis or in the case of a worker remunerated at piece rates, on the basis of the average daily remuneration referred to in Article 57 of this Law'.
Frequently Asked Questions
30 day notice period must for resigning
Q: I have been working as an auditor for a private company under an unlimited contract. Now I've got a better job and I've given the resignation but the company says that I have to give a minimum of three months' notice as per the offer letter I had signed while joining the firm. There is nothing mentioned about the notice period in the original labour contract which is registered at the Labour Department. Please tell me whether the 30-day notice period is required in my case.A: Both an employer and employee are entitled, as per Article 117 of the labour law, to terminate the unlimited contract of employment any time, yet with legal and acceptable reasons. However, both parties (employer and employee) are bound to notify each other in writing (notice) at least 30 days before ending their labour relationship, either by termination or resignation.
Such a notice period is an indispensable term whether it is stipulated in the contract of employment or not. In other words, no matter this condition is mentioned in the contract or not, it is applicable and guaranteed by law to protect the rights of both parties.
Reducing notice period against contract
Q: I am working in a company and my labour contract is for three years. My contract is unlimited and I have already completed two years of service. In my contract, it is said that I have to give a three-month notice period before resigning. I am planning to quit. Is it possible to give a one-month notice period? If not, what are the consequences?
A: The established principles of law in the UAE are that the contracting parties must observe all the provisions of the relevant contract and must fulfil their obligations accordingly. Since three months' prior notice is mentioned in your employment contract, as per the UAE Labour Law, you must give three-month prior notice for resigning the job. Otherwise, you will be held responsible for compensation in lieu of notice as per Article 119 of the UAE Labour Law.
According to the article, 'If the employer or the employee has failed to serve notice to the other party for termination of the contract or has reduced the notice period, the party obliged to serve the notice shall pay to the other party an indemnity called 'Compensation in lieu of notice', and the indemnity shall be equal to the employee's pay for the notice period in full or in proportion to the diminished part'.
Compensation for not serving notice period
Q: I have been working at an entity based at the Jebel Ali Free Zone (JAFZ) in Dubai for the last 20 months. I submitted my resignation on a notice period of 15 days instead of the required 30 days, as I had to return to my home country urgently. The company had sent me for offshore field service jobs and also gave me some training during this period. The company has asked me to repay the money it spent on my visa and training, along with 45 days' full salary, to proceed with the cancellation process. Do I have to pay the money?
A: You have not mentioned about the nature of your employment contract as to whether the same is of limited or unlimited duration. And therefore, our response is based on your working on an unlimited period employment contract vis-a-vis limited period employment contract. In accordance with the labour regulations applicable at the JAFZ, the presence of a written contract drawn on JAFZA template signifies the existence of a limited period contract. Otherwise, it is presumed that the employer and the employee have an unlimited period contract between them. Owing to this, the rules pertaining to termination of employment will follow the provisions of the Federal Law No 8 of 1980 on the Regulation of Labour Relations (the 'Labour Law').
In view of the foregoing, if your employment contract is of unlimited duration, then you are within your rights to terminate your employment by giving a prior notice of 30 days. This is in accordance with Article 117 of the Labour Law which states:
(1) Both the employer and the worker may terminate a contract of employment of unlimited duration for a valid reason at any time following its conclusion by giving the other party notice in writing at least 30 days before the termination.
However, it may also be noted that if the employee fails to give proper notice of termination or reduces the period of notice, then he shall be liable to compensate his employer for the number of days so reduced. This is in accordance with Article 119 of the Labour Law which states:
'Where an employer or a worker fails to give the other party notice of the termination of the contract or reduces the period of notice, the party obliged to give notice shall pay the other party compensation, called 'compensation in lieu of notice' even where no prejudice has been sustained by the other party as a result of such failure or reduction. The said compensation shall be equal to the worker's remuneration in respect of the entire period of notice or the time by which it was reduced. Compensation in lieu of notice shall be calculated on the basis of the remuneration last received, the case of worker remunerated on a monthly, weekly, daily or hourly basis or in the case of a worker remunerated at piece rates, on the basis of the average daily remuneration referred to in article 57 of this Law.'
Pursuant to the foregoing, if you were employed under an unlimited period contract, and you had given a prior notice of 15 days instead of the required 30 days, then you shall be liable to compensate your employer for the reduced period of notice that is, your salary for 15 days calculated on the basis of your last drawn full salary.
If however, your employment was of limited duration, you will be liable to compensate your employer with an amount equal to your 45 days' remuneration. This is in accordance with Article 116 of the Labour Law which states:
'Where a contract is revoked by the worker for reasons other than those specified in Article (121), he shall be required to compensate the employer for any damage the latter sustains as a result, provided that the amount of compensation shall not exceed half a month wage for three months or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.'
In view of this, you may be required to compensate your employer for an amount, which is equal to your salary for 45 days.
Further, you are not required to repay your employer for the cost of your employment visa, as this is against the laws of the UAE. The issue of repayment of training expenses will depend on the applicable regulations in JAFZ and also in accordance with the specific tewrms in your employment contract with respect to training.
In view of the foregoing, you may try and prevail upon your employer to cancel your visa in accordance with the law. However, if you and your employer fail to settle the matter amicably, in accordance with the provisions of law, you may consider to approach the relevant section at Jebel Ali Free Zone Authority, which deals with the disputes between the employers and employees.
Employer cannot recover Visa renewal cost
Q: I have been working in a foodstuff trading company since 1998. My residence visa was renewed in February 2012, but my labour card is expiring in February 2013 and my job contract is unlimited. Recently, due to some health problems of my father in India, I was unable to continue my work in Dubai, and hence submitted my resignation giving a 30-day notice period, which the company has accepted. I wish to cancel my visa and travel back to India. But the company told me they would impose a one-year ban and recover my salary for 45 days towards my visa renewal charges. Is this legal?
A: It is not legal for your employer to recover the visa's cost if you have given 30-day prior notice unless otherwise provided in your employment contract.
Under UAE laws, if an employee leaves a job without completing two years, then the Ministry of Labour will impose a work ban for six months or for one year if it is imposed by the company and during that time, the individual is not allowed to work in the UAE. Both these situations are not applicable to you as you have completed 14 years in the same company. Furthermore, a work ban is not applicable if the current or new employer is based in a free zone in Dubai.
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+ യുഎഇ: സന്ദര്ശക, ടൂറിസ്റ്റ് വീസകളില് എത്തുന്നവര്ക്ക് ഇനി രാജ്യം വിടാതെ വീസ മാറാം
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+ യുഎഇ: സന്ദര്ശക, ടൂറിസ്റ്റ് വീസകളില് എത്തുന്നവര്ക്ക് ഇനി രാജ്യം വിടാതെ വീസ മാറാം
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Are you planning to Set-up your business in Dubai? Call us for Setting up new business, LLC Formation, Amendment in existing license, PRO Service and Translation. +971 55-273 2295, 055-345 7829, 04-239 1302 or mail your queries to visaprocess.ae@gmail.com
Are you planning to Set-up your business in Dubai? Call us for Setting up new business, LLC Formation, Amendment in existing license, PRO Service and Translation. +971 55-273 2295, 055-345 7829, 04-239 1302 or mail your queries to visaprocess.ae@gmail.com
