Introduction:
Terminating a limited contract in UAE law can be confusing for both employers and employees. In this article, we will discuss the basics of limited contract termination under the UAE labor law.
What is a limited contract?
A limited contract is a type of employment contract in the UAE that has a specific end date. Once the end date arrives, the employer and employee must mutually agree to renew the contract or terminate it. This type of contract is often used for project-based work or seasonal jobs.
Termination of a limited contract:
According to UAE labor law, both the employer and employee have the right to terminate a limited contract before the end date, provided there is a valid reason for doing so. Valid reasons for termination may include:
1. Non-performance or poor performance of the employee
2. Misconduct by the employee
3. Breach of the employment contract by either party
4. Mutual agreement to terminate the contract
5. Closure of the company or establishment where the employee is employed
If either party wishes to terminate the contract before the end date, they must give notice as per the terms of the contract. Typically, this notice period is stated in the contract and is usually 30 days.
In case of termination due to non-performance or misconduct by the employee, it is important for the employer to follow the proper disciplinary procedure as outlined in the labor law. Failure to follow the proper procedure may result in legal action against the employer.
What happens after termination?
After the termination of a limited contract, the employer is required to provide the employee with a final settlement that includes end of service benefits such as gratuity pay, leave balance, and any other entitlements as per the labor law.
Conclusion:
Terminating a limited contract in UAE law requires employers and employees to follow the proper procedures outlined in the labor law. It is important to ensure that valid reasons for termination exist and that the proper notice is given. Following the proper procedures can help prevent legal action against either party and ensure a smooth transition for both the employer and employee after termination.