Business

What is the price of resigning early from a limited contract in UAE?

When a woman is sponsored by her husband, he is responsible for her residency visa, not the employer.

Keren Bobker

August 22, 2014

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  • Arabic

I am an expat on my husband's visa, working for about six months with a company in Abu Dhabi on a limited contract. I am an engineer but I am doing an administration job for just Dh4,000 a month. My probationary period as per my employment contract is three months. My husband has now secured a job in Dubai and so I have decided to move to Dubai, resigning from my current job. In this scenario, please tell me what am I liable to pay to my employer. Should I still pay 45 days' salary, although I am sponsored by my husband? Will I have a work ban and is it possible to lift it? PN, Abu Dhabi.

When a woman is sponsored by her husband, he is responsible for her residency visa, not the employer, so in this case an employment ban cannot apply even if resigning a position within the first 12 months. PN will not have a work ban, but if she has a limited contract and wishes to leave before the end of the pre-agreed term, there will be a penalty to pay. Article 16 of UAE Labour Law states that “if the contract has been terminated on part of the employee … the employee becomes liable for compensating the employer against losses incurred by him in consequence of contract termination, provided that the amount of compensation may not exceed half a month’s pay for a period of three months or for the remaining period of contract whichever is shorter, unless the terms of the contract provide otherwise.” Half a month’s pay for three months is broadly equivalent to 45 days’ pay.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai with more than 20 years’ experience. Contact her at keren@holbornassets.com

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.

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