No ban for worker after being employed by UAE company in excess of two years

I work at a private hospital in Abu Dhabi under a limited contract. In July it will be my third year with the company. I would like to resign because I have received an offer from another private hospital. Will I receive an employment ban if I leave? Will I have to pay the company for leaving earlier than what is stated in my contract? KC, Abu Dhabi

If someone is on a limited/fixed term contract and leaves the company before the end of the set term, they can be asked to pay the employer. Limited contracts are now mostly for a period of two years. With reference to fixed-term contracts, article 116 of UAE Labour Law states: “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.” This should be calculated on basic pay. Had the employer chosen to break the terms they would have to pay a penalty to the employee, so the contract terms cover both parties. Anyone who leaves a company having been employed for a period in excess of two years will not receive an employment ban. Therefore KC will not receive a ban and will not have to pay anything to the company for leaving.

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

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