Leaving a contract early is trouble, even with an NOC from UAE employer

Keen Bobker

I would like to ask if there will be a problem if I resign now with my company. I am in the probationary period of six months and I have completed three months already. My labour contract is on a limited basis of two years, so will I get an automatic ban if I resign now? What if I get a salary of Dh8,000 for a new job and have a bachelor's degree? My current boss is leaving and wants me to join her, so does that make a difference? DT, Abu Dhabi

The law states that anyone who leaves their job on a voluntary basis having worked for the company for less than two years will be subject to a labour ban, but this can be reduced to a period of just one year if someone has a specific salary and a degree. A ban in this situation cannot be lifted with an NOC, so the only way not to get a ban would be to be made redundant. An added complication is that anyone who breaks the terms of a fixed contract will also receive a penalty, whether that is the employee or an employer. If an employee wants to leave early they are subject to a penalty of up to 45 days’ pay – specifically, “half a month’s pay for a period of three months or for the remaining period of contract, whichever is shorter” per Article 116 of UAE Labour Law. If the employer terminates a fixed contract early then Article 115 states “If the employer has terminated an employment contract with a limited period ... he becomes liable for payment of compensation to the employee against damages sustained by him, provided that the sum of compensation in all events may not exceed the total pay due to him for a period of three months or for the remaining period of contract whichever is shorter.” It seems that the only way to avoid a ban would be to work for the current company for a full year unless you can make an alternative arrangement to leave by mutual agreement without invoking compensation terms.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 year’s experience. Contact her at [e-mail] Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice

Follow us on Twitter @TheNationalPF