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Understanding Contract Termination: Your rights and options
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What happens if your contract is terminated? What rights do you have if you are terminated?
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Here you can find all the details about contract termination.
If an employer dismisses its employee, the employee is entitled to a gratuity if he or she has worked for at least one year of service.
Common Reasons for Contract Termination:
Breach of Contract: When one party fails to fulfill their obligations under the agreement, the other party may have the right to terminate the contract. This can occur when a party breaches a material term of the contract or repeatedly violates its provisions.
Mutual Agreement: Both parties may agree to terminate the contract early, often with a mutual termination agreement. This can be beneficial for both parties if circumstances change or if they believe it is in their best interests to end the agreement.
Force Majeure: If an unforeseen event, such as a natural disaster or war, prevents one or both parties from fulfilling their obligations, the contract may be terminated due to force majeure. This clause typically exempts parties from liability in cases of extraordinary events beyond their control.
Expiration of Term: If the contract has a specific term or duration, it will automatically terminate at the end of that period unless renewed. This is a common reason for contract termination when the agreement is for a fixed period of time.
Other Reasons: Other reasons for contract termination may include bankruptcy, insolvency, or specific provisions outlined in the contract. These provisions can vary widely depending on the nature of the agreement and the applicable laws.
Important Considerations for Contract Termination:
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Notice Periods
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Many contracts require parties to provide notice before terminating the agreement. The length of the notice period may vary depending on the type of contract and the circumstances. This notice period allows parties to prepare for the termination and take necessary steps to mitigate any adverse effects.
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Termination Fees
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Some contracts may include termination fees or penalties that must be paid by the party terminating the agreement. These fees can be a significant financial consideration, especially if the contract is terminated early.
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Dispute Resolution
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If there is a dispute about whether a contract has been terminated lawfully, the parties may need to resolve the issue through negotiation, mediation, arbitration, or litigation. These dispute-resolution mechanisms can help parties avoid costly and time-consuming legal proceedings.
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FAQs on Contract Termination:
What are your rights if you get fired? How is your gratuity calculated?
If you are employed by a mainland company based in Dubai. Therefore, the provisions of Federal Law No. 8 of 1980 regulating employment relations in the UAE (the ‘Labor Law’), Federal Law No. (6) of 1973 on Immigration and Residence, as amended by Law No. (7) of 1985, Law No. (13) of 1996 and Federal Decree No. (17) of 2017 (the ‘Immigration Law’) apply, an employee is entitled to a gratuity after termination by the employer if he or she has worked for at least one year. This is in line with Article 132 of the Labor Law, which states that “The employee who has worked continuously for at least one year shall be entitled to a gratuity upon the termination of his employment. Days of unpaid absence from work shall not be taken into account when calculating the length of service, and compensation shall be calculated as follows:
- Twenty-one daysโ pay for each year of the first five years of service.
- Thirty daysโ pay for each additional year.
Provided that the total compensation shall not exceed two yearsโ salary.
Since we are a PRO Service company, we can help you calculate the gratuity you will receive from the company.
Are you entitled to get a plane ticket to return to your home country when your contract is terminated?
The employee is also entitled to cash compensation for annual leave not taken. The employer must pay the cost of the employee’s airplane ticket to his/her home country. This is in accordance with Article 79 of the Labor Code and Article 131 of the Labor Code.
Can you ask the company to hold your visa until you find another job?
You can ask your employer not to cancel your residence visa for a certain period of time until you find new employment. However, the decision to keep your residence visa is at the discretion of your employer. Article 19 of the Immigration Law states, “Foreigners who have obtained a residence permit shall be subject to the provisions of Article (11) of this Law. They must leave the country if their residence permit is revoked or its term expires.”
How many grace periods do you have if the employer has canceled your visa?
You only have 30 days grace period to find another job or change your residency status in the country. However, thereโs news that the UAE government has recently extended the period of stay in the country after the cancellation of a work visa by a period of 180 days. However, you can check with the General Directorate of Residency and Foreigners Affairs (GDRFA) to see if the said order has been implemented.
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Here are related links to this article for your reference:
- UAE Labour Law: Can I Start a Business While Being Employed Full-Time?
- Is it Legal to Keep a Visa After an Employeeโs Notice Period?
- New UAE Labour Law: What Employment Contract Must Include
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