“Can I resign after 6 months in an unlimited contract?” This is the main doubt that many employees have concerning their jobs. If an employee signs a contract, but for any reason, they need to resign, it is best to do it by the law.
In this article, you are going to learn more about the answer to the question: can I resign after 6 months in an unlimited contract? Moreover, will gain more insight into the types of contracts in the UAE. Let us observe:
- What are the types of contracts in the UAE?
- How can an employee terminate a contract?
- How can an employer terminate a contract?
- What are the end-of-service calculations of a contract?
- What are the items included in a contract?
- How can Connect Resources assist you with contract termination?
1. What are the types of contracts in the UAE?
Before starting the employment relationship, the employer must choose a type of contract. This decision intends to mitigate risk. According to the previous UAE Labour Law No.8 of 1980, there were two types of contracts that employers could issue to employees: unlimited contract UAE and limited contract UAE.
But, with the most recent Labour Law, the Federal Decree Law No. 33 of 2021 that came into effect as of February 2022, employers can now hire workers by providing a single type of contract, which is a fixed-term employment contract.
Nevertheless, many employees are still under an unlimited contract. In this case, the law stipulates that they should be converted into fixed-term employment contracts within one year of the effective date of said contract. Therefore, unlimited contracts may no longer be issued in the UAE.
Although these are recent changes, it is still important to learn about these two types of contracts that are used in the UAE.
1.1 What is a limited contract in UAE?
A UAE limited contract, also known as a fixed-term contract, has an expiry date, which typically is the duration of the visa. Therefore, the limited contract is for two to three years, depending on each employer.
This means that the contract will expire automatically, once it is reached the end of the term. However, any of the two parties involved can decide to terminate it before. It can be renewed but only if both parties agree. Previously, fixed-term contracts could be converted to unlimited contracts at the end, but now it is not possible.
What is the notice period for a limited contract in UAE? When it comes to limited contracts, they usually do not have a notice period provision. This is because the contract simply expires once the term has ended. However, if any of both parties terminate the contract, then the notice period may be necessary.
Since this contract has a fixed term, many people tend to ask themselves the question “can I resign after 6 months in UAE?” and the truth is that they can do it.
The limited contracts are more useful for companies that need to engage employees for a specific period, like a work project, and since they know the length of those projects it was better to provide this type of contract.
1.2 What is an unlimited contract?
Before the new Labour Law came into force, employers could issue unlimited term contracts to their employees.
An unlimited term contract is open-ended, which means that does not have an expiry date. However, an employer or an employee may decide to terminate the contract whenever they have a valid reason to do it.
This type of contract was seen as more flexible than limited term contracts, and employers tend to issue this one more to their employers since it was user-friendly. It was a great solution for employees that wanted to stay for a long time in the UAE and that did not have to carry out project work.
2. How can an employee terminate a contract?
Once you have a complete understanding of the types of contracts and the most recent regulations about them, it is important to understand how the contract can be terminated.
Since there are two types of contracts, there are different specifications. For a limited contract resignation, there are some instructions, and for unlimited term contract, there are others.
2.1 How can I resign with limited contract in the UAE?
According to the UAE Labour Law for resignation in a limited contract, an employee may resign under the provisions of Article 121 of the Labour Law.
Termination of the contract should be of mutual consent. If the employee wants to terminate the contract before the expiry date, he or she must provide written notice. Therefore, the employee should carry out their tasks during the notice period established in the contract. This notice period cannot be less than one month and not more than three months.
It is important to note that both parties should follow the due process for the termination of the contract. Moreover, when it comes to resignation during probation period in the UAE 2022, the employee must provide a 14 days notice, in case they are leaving the country, and 1 month’s notice if they are leaving to work for another employer.
But, in some cases, the employee may resign without notice according to Article 45 of the Labour Law:
- If the employer does not fulfill the conditions stated in the contract
- The employer assaults the employee
- If the employer assigns other work to the employee without his or her agreement
2.2 How can I resign under an unlimited contract in the UAE?
To resign under an unlimited contract, the employee should provide a notice period. This usually is of 30 calendar days as a minimum and a maximum of three months. There is no compensation for early termination for an unlimited contract resignation.
2.3 Frequently asked questions
These are some frequently asked questions about UAE limited contract resignation and resignation during probation period unlimited contract UAE:
- Can I resign during probation period in an unlimited contract?
According to the recent regulations, you can resign during probation period UAE but you have to provide a notice period that will vary depending on if you are leaving the UAE or if you are going to start another job in the country.
When it comes to the resignation during probation period in limited contract, it is important to provide notice. If you resign during the probation period without notice you may be subject to a Labour Ban.
- Can I resign in a limited contract?
Yes, you can resign under a limited contract. However, in this case, both parties must consider the compensation for early termination.
- Can I resign after 6 months in an unlimited contract?
It does not matter how long you have been working for an employer, you can decide when to resign. Therefore, when it comes to unlimited contract resignation during probation, you can do it.
According to the unlimited contract resignation UAE 2021 you can resign and provide a notice period.
- Can I resign after 6 months in a limited contract in the UAE?
Yes, you can resign even if you have been working for more than 6 months. As per the limited contract resignation UAE 2017, you can decide when you want to leave.
3. How can an employer terminate a contract?
When discussing the UAE labour law resignation, it is also important to know when an employer can terminate the contract.
According to the new Labour Law about the UAE unlimited contract and limited contract, both parties may terminate the employment relationship as long as they serve a notice period.
In the case of the employer, it should provide a notice in writing to the employee stating the period. If the employer does not provide the notice to the employee, then it should issue monetary compensation. According to Article 43 of the Labour Law, the employer should do the pay in lieu of notice.
Previously, the employee had to provide under a limited contract 45 days salary, but with the recent modifications to the law, it is no longer necessary.
However, it is important to point out that an employer may terminate the contract without notice. This is as long it has completed an internal investigation, in the following cases:
- The employee submits false documentation or adopts a false identity
- The employee does not follow instructions from the employer to perform the duties
- He or she violates safety instructions putting everyone at risk
- The employee fails to perform the basic duties for which he or she was hired for
- He or she incurs in the divulgation of disclosed information or secrets about the company
- He or she is found working drunk or under the influence of drugs
- Assaults a worker, manager, or employer
- Joins another company without doing the due process
- The employee is absent for more than 20 intermittent days or more than 7 successive days
- He or she uses the position illegally to obtain personal benefits or gains
4. What are the end-of-service calculations of a contract?
Once you know the answer to the question: can I resign after 6 months in an unlimited contract? You need to consider all the additional aspects that come with contract termination. We are referring to end-of-service calculations.
These are also known as end-of-service benefits or gratuity pay. When it comes to national workers, the employer has to follow the regulations for social security in the UAE.
But, when it comes to a foreign employee, whether under a fixed-term or unlimited contract, the calculations are as follows:
- Employees that have worked for less than a year: no gratuity pay
- Employees that have worked for more than a year but less than 5: full gratuity pay. 21 days of salary for each year worked
- For employees that have served for more than 5 years: full gratuity pay. 30 days of salary for each year worked following the first five years.
In any case, the gratuity pay cannot be more than two years of wage. For this reason, employee benefits may be difficult to calculate.
In this regard, it is useful to have a partner that can support you and provide outstanding payroll services.
5. What are the items included in a contract?
Many items should be included in a contract. Both parties should be aware that there are provisions for every aspect or situation that may arise. For example, if the employee does not know the answer to the question: can I resign after 6 months in an unlimited contract? It is best to check the contract to see if there are any specifications for it.
Every contract should contain the following:
- Date of start and conclusion (fixed-term contract)
- Nature of the work
- Specifications about the workplace
- Remuneration and compensation
6. How can Connect Resources assist you with contract termination?
Can I resign after 6 months in an unlimited contract? Learn how to address this question and much more others from your employees by partnering with the top agency in the UAE. Our specialists at Connect Resources want to help you understand the Labour Law and to work in compliance.
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