UAE Jobs: Common Mistakes Employees Make When Resigning, Claiming Gratuity

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Resignation and notice periods

Article 43 of the Federal Decree-Law No. (33) of 2021 On the Regulation of Labor Relations Employment Law (the“Employment Law”) provides that either an employee or an employer may terminate an employment contract for a legitimate reason, subject to written notice of not less than 30 days and not more than 90 days, in accordance with the notice period agreed in the employment contract. The Article 43(1) of the Employment Law states:

“Either party to the employment contract may terminate the contract for any legitimate reason, provided that the other party is notified in writing, and commits to work within the warning period agreed upon in the contract, provided that the period is not less than thirty (30) days, and not more than ninety (90) days.”

At times an employee assumes that resignation immediately terminates their employment or that they may discontinue attending work without completing the notice period. The applicable notice period (if not agreed otherwise) must be adhered to.

Article 43(3) further provides that“The party who does not abide by the warning period must pay the other party a compensation called a warning allowance, even if the failure to warn does not result in harm to the other party. Such compensation shall be equal to the Worker's wage for the entire warning period or the remaining part of it.” Accordingly, an employee who fails to serve the agreed notice period may be liable to pay compensation equivalent to the wage for the unserved period. Similarly, an employer who fails to comply with the applicable notice period may be required to compensate the employee.

Employees should submit their resignation in writing, retain evidence of its submission and acceptance, handover the belongings of the employer and obtain a receipt, not to delete or copy or destroy any data of an employer, and ensure that the effective resignation date and last working day are clearly recorded. They should also avoid abandoning employment without following the applicable termination procedures.

End-of-service gratuity

Article 51 of the Employment Law governs end-of-service gratuity for eligible employees. Under Article 51(2) of the Employment Law, a foreign employee working on a full-time basis who completes at least one year of continuous service is entitled to gratuity upon termination of employment.

“The foreign full-time Worker, who has completed one or more years of continuous service, is entitled to an end-of-service gratuity upon the end of his service, calculated according to the basic wage, as follows:
a. The wage of twenty-one (21) days for each year of the first five years of service.
b. The wage of thirty (30) days for each year in excess of that.”

Article 51(6) of the Employment Law further provides:

“The foregoing is provided that the total end-of-service gratuity for the foreign Worker does not exceed two years' wage.”

Outstanding salaries and final settlement

The Article 53 of the Employment Law requires an employer to pay an employee's wages and other entitlements within 14 days from the date of termination of the employment contract.

“The Employer shall pay the Worker, within fourteen (14) days as of the date of the end of the contract, his wages and all other entitlements stipulated in this Decree by law and the Executive Regulation thereof.”

Salary disputes and deductions

The Article 22 of the Employment Law requires wages to be paid in accordance with the agreed terms and conditions of employment. Employers are required to pay wages through the Wage Protection System, where applicable.

Article 25 of the Employment Law regulates deductions from employees' wages and establishes restrictions on the circumstances and amounts in which deductions may be made.

Protection of employment rights

An employee who believes that an employer has unlawfully withheld wages, end-of-service benefits or other employment entitlements or is depriving an employee of its lawful rights should first raise the matter with the Ministry of Human Resources and Emiratisation (MoHRE). The Article 54 Federal Decree-Law No. (9) of 2024 Amending Some Provisions of Federal Decree-Law No. (33) of 2021 On the Regulation of Labor Relation (the“Amended Employment Law”, governs the resolution of individual employment disputes. Under Article 54(2) of the Amended Employment Law, MoHRE may issue a decision where the value of the claim does not exceed AED 50,000, or where either party fails to comply with an amicable settlement decision previously issued by the MoHRE,

Article 54(3) of the Amended Employment Law further provides that a party dissatisfied with such a decision may file a case before the competent Court of First Instance within 15 working days from the date of notification or announcement of the decision. Where an amicable settlement is unsuccessful in cases outside the MoHRE's decision-making jurisdiction, the dispute is referred to the competent court in accordance with Article 54(4) of the Amended Employment Law.
Furthermore, the Article 54(9) of the Amended Employment Law provides:

“A lawsuit shall not be heard regarding any of the rights arising under the provisions of this Decree-Law after two years have passed from the date of termination of the employment relationship.”

An employee may consider seeking clarification or assistance from MoHRE where there are concerns regarding employment entitlements or the employer's compliance with applicable Employment Law provisions. Both an employee and an employer may benefit from maintaining proper documentation and familiarising themselves with the applicable legal requirements and dispute-resolution procedures. This may help reduce the likelihood of disputes and facilitate their resolution, should they arise.

Applicable legal provisions:
Federal Decree-Law No. (33) of 2021 On the Regulation of Labor Relation
Federal Decree-Law No. (9) of 2024 Amending Some Provisions of Federal Decree-Law No. (33) of 2021 On the Regulation of Labor Relation

Ashish Mehta is the founder and managing partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: Readers may e-mail their questions to:... or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

Disclaimer: The information provided above is intended for general guidance and does not constitute legal advice. It is recommended to seek formal legal counsel.

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