What are the options for UAE employee with a limited contract about to expire?

I have a limited work contract that finishes in December this year. My plan is to renew, as my boss said the company needs more staff. I am not sure if I can stay as long as another two years, though. If I renewed and resign after a few months, would I get a ban? LV, Abu Dhabi

As service is counted from the very beginning there would be no employment ban on resigning after renewal as he would have been in employment for over two years and therefore free to move to another job. What he does need to watch out for is the nature of the contract at renewal. If it continues on an unlimited basis, which is often the case, there will be no issues, but if the contract is renewed as another fixed, or limited, contract, there would be a penalty from the employer for breaking the terms of the contract. 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.” Similarly the employer must compensate the employee if a contract is terminated early but it is best that all employees on fixed contracts understand the potential costs for leaving service early.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 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.

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