No need to serve notice period in UAE if employee compensates

employee, UAE law, UAE labour law, Dubai jobs, UAE jobs, employment contract

Dubai - Know the law in UAE.



By Ashish Mehta

Published: Tue 29 Oct 2019, 1:18 PM

Question:
I am an engineer employed by my current employer on an employment contract of unlimited duration. I have completed 2 years and 6 months of employment. Recently, I received a job offer from another company and am eager to take it up. I resigned from the employment with my current employer and served them a notice period for 45 days and agreed to pay in lieu for another 45 days as my employment contract states 90 days' notice period if any of the parties intends to terminate it. My current employer accepted my resignation, but has asked me to comply with the 90-day notice period mentioned in my employment contract. Can my current employer restrain me from leaving the employment prior to the completion of  90 days of notice period?
Answer: 
We assume that you are employed in a mainland based in UAE and therefore, the provisions of Federal Law No. (8) of 1980 regulating Employment Relations in the UAE (the 'Employment Law') and Ministerial Decree (765) of 2015 on Rules and Conditions for the termination of Employment Relations (the 'Ministerial Decree No. 765 of 2015') are applicable.
As per the provisions of the Employment Law, it may be noted that an employment contract only terminates upon the completion of the notice period during which an employee is required to perform his duties for which he shall be remunerated and the notice period requirement may not be waived or reduced but it may be extended.
This is in accordance with Article 118 of the Employment Law which states: "A contract shall subsist throughout the notice period referred to in the preceding Article and shall terminate only on expiry of that period. The employee shall be entitled in respect of the notice period to full pay, calculated on the basis of his last salary, and shall continue to perform his duties during that period if the employer so requests. The parties may not agree to waive the notice requirement or to reduce the notice period; however, they may agree to extend the period."
However, if any employee does not adhere to the notice period mentioned in the job contract to terminate his employment agreement then he should compensate the employer by paying remuneration for the number of days for which he has not served the notice period.
This is in accordance with Article 119 of the Employment Law which states: "Where either the employer or the employee fails to serve a notice of termination on the other or reduces the period of notice, the party obliged to give the notice shall pay the other party a "compensation in lieu of notice", irrespective of whether or not the other party has sustained damage as a result of such failure or shorter notice. The said compensation shall be equal to the employee's salary in respect of the entire or reduced period of notice. Compensation in lieu of notice shall be calculated on the basis of the last salary received, in the case of monthly, weekly, daily and hourly paid employees, and on the basis of the average daily wage referred to in Article 57 of this law in the case of those paid on piecemeal." 
Further,  as per the Ministerial Decree No. 765 of 2015, an unlimited employment contract is terminated when either the employer or an employee terminates the employment agreement at any time provided the terminating party notifies the other party and continues to abide by the contractual obligations for the duration of the notice period. This is in accordance with Article 1 (II) (2) of the Ministerial Decree No. 765 of 2015 which states: "An employment relation between employer and employee may be terminated as follows:
II - In the case of unlimited (not term-bound) contracts, an employment relation is terminated if any of the following instances occurs:
2- One party acts, at any time, to terminate the contract subject to notifying the other party and continuing to honour contractual obligations for the duration of the notice period, which cannot be less than one month and cannot exceed three months."
It may be pertinent to note that the terminating party who terminates the employment contract unilaterally without adhering to the conditions listed in Article 1 (II) (2) of the Ministerial Decree No. 765 of 2015 may have to bear the legal consequences for early termination of employment. This is in accordance with Article 1 (II) (3) of the Ministerial decree which states: "An employment relation between employer and employee may be terminated as follows:
II - In the case of unlimited (not term-bound) contracts, an employment relation is terminated if any of the following instances occurs:
3- One party (employer or employee) acts unilaterally to terminate the contract, without complying with the legal conditions described in (2) above and without reason of non-compliance by the other party; in this case the terminating party bears any legal consequences of early termination.
In all instances of termination described in this Article (1), either employer or employee may refer to the judicial system to seek indemnification or recover other rights under the Federal Employment Law and its implementing decrees."
Based on the aforementioned provisions of the Employment Law and the Ministerial Decree, it may be noted that you are under a contractual obligation to perform your duties during the notice period. As you have resigned by serving 45 days of notice period and willing to compensate your employer by paying 45 days of remuneration for not serving the entire 90 days of notice, your actions are well within the framework of Employment Law of the UAE and therefore, your employer is not in a position to demand from you to serve the complete 90 days of notice period. 
Know the law

Where either the employer or the employee fails to serve a notice of termination on the other or reduces the period of notice, the party obliged to give the notice shall pay the other party a compensation in lieu of notice

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

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