The 30 to 90-day notice period required under UAE Federal Decree-Law No. 33 of 2021 for terminating employment contracts, applicable to both employers and employees.
Key Takeaways
The UAE's labor law underwent its most significant reform in over 40 years when Federal Decree-Law No. 33 of 2021 replaced the old Federal Law No. 8 of 1980. The new law, effective from February 2, 2022, standardized all employment contracts as fixed-term (limited) contracts, eliminated the distinction between limited and unlimited contracts, and clarified notice period requirements. Under the new law, both the employer and the employee must provide written notice before terminating the employment contract. The minimum notice period is 30 days. The maximum is 90 days. The actual notice period is whatever the employment contract specifies, as long as it falls within this 30 to 90-day range. The notice period must be reciprocal. An employer can't require 90 days from the employee while offering only 30 days from its side. Article 43 of the Decree-Law explicitly states that the period shall not be less than 30 days for both parties. This was a major change from the old law, which created different notice requirements depending on whether the contract was limited or unlimited, and whether the employer or employee was initiating the termination.
Under the previous Federal Law No. 8 of 1980, the rules were confusing. Unlimited contracts required 30 days' notice from either party (or as specified in the contract, with a minimum of 30 days). Limited contracts didn't have a standard notice period. If either party terminated a limited contract before expiry, they owed the other party compensation (typically 3 months' salary or the remaining contract value, whichever was less). The new law simplifies this: all contracts are fixed-term (up to 3 years, renewable), and all terminations require the notice period specified in the contract (minimum 30 days, maximum 90 days). Compensation for early termination is now calculated differently, based on the shorter of 3 months' salary or the salary for the remaining contract period.
Probation in the UAE is governed by Article 9 of Federal Decree-Law No. 33 of 2021. The notice requirements during probation differ from the post-probation period.
If the employee wants to leave the UAE entirely during probation, they must give 14 days' written notice. If the employee wants to move to another employer within the UAE, they must give the current employer 1 month's notice. The new employer must also compensate the current employer for recruitment costs, unless the employee and new employer agree otherwise. This provision is designed to prevent companies from poaching employees during probation without bearing the recruitment cost the original employer incurred.
The employer can terminate the employee during probation with 14 days' written notice. The employee is entitled to their earned salary and any accrued leave for the period worked. End-of-service gratuity does not apply during probation, as the employee hasn't completed 1 year of continuous service. If the employer terminates without the required 14-day notice, they must pay salary in lieu of the unserved notice period.
The maximum probation period under the new law is 6 months. It can't be extended or renewed with the same employer for the same role. If the employee passes probation, the probation period counts toward the total length of service for end-of-service gratuity calculations. The probation terms must be written into the employment contract. If the contract doesn't mention probation, the employee is considered confirmed from Day 1.
During the notice period, the employment relationship continues. Both parties have rights and obligations.
The employee must continue performing their duties throughout the notice period. Absenteeism or deliberate underperformance during notice is treated the same as during regular employment. It can result in disciplinary action. The employee's salary, benefits, and leave entitlements continue as normal. If the employee has accrued annual leave, the employer may require them to take some or all of it during the notice period, effectively shortening the period the employee physically works.
The employer must continue paying the employee's full salary and benefits throughout the notice period. Under Article 43(3) of the Decree-Law, the employer must grant the employee at least 1 unpaid day per week during the notice period to search for new employment. This job search day is a legal right, not a favor. The employer can't deny it. The employee and employer should agree on which day of the week this applies. If they can't agree, the employee can choose, provided they give 3 days' advance notice.
Either party can choose to pay salary in lieu of the notice period (or the unserved portion). If the employer wants the employee to leave immediately, they pay the full notice period salary. If the employee wants to leave early, they pay the employer the salary for the unserved days. The payment is calculated based on the employee's most recent salary, including basic salary and allowances. The calculation should include housing allowance, transportation allowance, and other regular contractual allowances, but not discretionary bonuses or overtime.
End-of-service gratuity is a mandatory payment owed to all employees who complete 1 or more year of continuous service. The notice period affects gratuity calculations.
Under Article 51 of the Decree-Law, gratuity is calculated based on basic salary only (not including allowances, bonuses, or overtime). The formula: 21 days' basic salary per year for the first 5 years. 30 days' basic salary per year for each year beyond 5. The total gratuity can't exceed 2 years' total salary. Part-year service is prorated. The notice period counts toward total service for gratuity calculation purposes. An employee who serves notice for 90 days at the end of a 4 year and 9 month tenure reaches the 5-year threshold, which matters for the calculation rate change.
Under the new law, all employees who complete 1+ year of service are entitled to full gratuity, regardless of whether they resign or are terminated. This was a major change from the old law, which reduced gratuity for employees who resigned with limited contracts. Employees who resign during probation (before completing 1 year) are not entitled to gratuity. Employees terminated for gross misconduct under Article 44 (theft, fraud, assault, intoxication at work, etc.) forfeit their gratuity entitlement.
Companies operating in UAE free zones may be subject to different rules. Free zone authorities like DIFC and ADGM have their own employment regulations.
DIFC has its own employment law: DIFC Law No. 2 of 2019. Notice requirements differ from mainland UAE law. The minimum notice period is 7 days for employees with less than 3 months of service, 30 days for 3 months to 5 years, and 90 days for 5+ years. DIFC doesn't mandate gratuity. Instead, employers must contribute 5.83% of the employee's basic salary to the DEWS (DIFC Employee Workplace Savings) scheme, which functions like a pension. Companies in DIFC should follow DIFC employment law, not mainland UAE labor law.
ADGM follows the ADGM Employment Regulations 2019. The minimum notice period is 7 days during probation (up to 6 months), 30 days for less than 5 years of service, and 90 days for 5+ years. ADGM uses a similar savings scheme (ADGM Workplace Savings) instead of end-of-service gratuity. Other free zones (DMCC, JAFZA, DAFZA, etc.) generally follow mainland UAE labor law (Federal Decree-Law No. 33 of 2021) for employment matters unless their regulations explicitly state otherwise.
| Zone | Minimum Notice (< 5 years) | Minimum Notice (5+ years) | Gratuity System |
|---|---|---|---|
| Mainland UAE | 30 days (per contract, minimum 30) | Up to 90 days (per contract) | End-of-service gratuity (21/30 days per year) |
| DIFC | 30 days | 90 days | DEWS savings scheme (5.83% of basic) |
| ADGM | 30 days | 90 days | ADGM Workplace Savings scheme |
| Other free zones (DMCC, JAFZA) | Per mainland law (30 days min) | Per mainland law (up to 90 days) | End-of-service gratuity (mainland rules) |
Different types of termination trigger different notice and compensation rules under the UAE Decree-Law.
Both parties agree to end the contract. This is the cleanest exit. The notice period terms are whatever both parties agree to (but the employer can't waive the employee's gratuity entitlement, as it's a statutory right). Mutual termination is common when the employee wants to leave and the employer has no reason to enforce the full notice.
The employer must provide the contractual notice period (30 to 90 days), continue paying salary and benefits during notice, pay all outstanding salary and accrued leave, pay end-of-service gratuity, and provide a 30-day grace period for the employee to remain in the UAE to settle affairs or find new employment. Under the old law, terminating a limited contract without cause required paying the employee compensation of up to 3 months' salary. The new law retains a similar concept: the employer must pay the employee the shorter of 3 months' salary or the salary for the remaining contract period.
Article 44 lists the grounds for immediate dismissal without notice: adopting a false identity, committing a crime or act of dishonesty, assaulting the employer or a colleague, revealing confidential business information, being absent without valid reason for 20+ non-consecutive days or 7+ consecutive days in a year, and intoxication or drug use during work. In summary dismissal, no notice is required. The employee forfeits gratuity but is entitled to earned salary and accrued leave through the dismissal date. The employer must document the cause thoroughly, as wrongful dismissal claims can be filed with MoHRE.
HR teams managing notice periods in the UAE should follow this compliance checklist to avoid MoHRE (Ministry of Human Resources and Emiratisation) disputes.
Key data on UAE employment practices and labor law compliance.