How To Review UAE Employment Contracts & Termination Terms

Are you about to sign a new employment contract or dealing with questions about how one ends? The terms you agree to now can shape your pay, leave, and exit rights later. What looks like a small detail often affects how things play out in practice.

UAE employment contracts can differ more than most people expect. Some meet legal standards, others leave out key entitlements or create room for confusion. Vague notice terms, unlawful deductions, or unclear salary breakdowns often go unnoticed until a problem arises.

This article outlines what to check before signing, what to question, and how to handle unclear or disputed terms under UAE labour law.

What should be in a UAE employment contract?

Every UAE employment contract must be in writing and, for mainland roles, follow the official MOHRE format. One of the first things it should confirm is the type of contract on offer. Most are fixed term, usually capped at two or three years. Others may be part time or temporary. Each comes with different rules around hours, benefits and termination, so it’s important the classification is correct and clearly stated. The contract should also set out the basic salary, job title, working hours and location, along with terms for probation, leave, notice and end-of-service. It should be clear who covers visa and recruitment costs, how overtime is paid and what happens when the employment period ends. Vague or missing terms in any of these areas can create problems later.

Clauses that deserve a closer look

Certain clauses shape how the contract works day to day and in key transitions, such as job changes, resignation or leave. These are worth reviewing carefully before signing.

• Probation periods: The probation period can run up to six months. If an employer ends the contract during this time, they must give at least 14 days’ notice. If an employee resigns and plans to leave the UAE, one month’s notice is required. If they stay, the notice period is 14 days.
• Non-compete clauses: To be valid, these clauses must set out the scope, industry, location and time period. They cannot exceed two years. Vague or overly broad restrictions often fail in practice, especially if they block someone from earning a living without a clear business case.
• Notice periods: Once probation ends, notice must be between 30 and 90 days. The contract should state the length clearly. During probation, notice depends on who initiates the termination and whether the employee is exiting the UAE.
• Leave entitlements: Employees are entitled to 30 calendar days of paid annual leave after one year of service, plus paid public holidays. Sick leave follows separate rules, with specific limits and documentation requirements.

Termination terms and what they mean in practice

Termination is a formal part of the employment cycle. UAE labour law sets out when and how a contract can legally end, along with the obligations that follow. The key areas below often determine whether the exit process runs smoothly or leads to a dispute.

• Dismissal: Employers can end a contract for reasons related to the role, company structure or performance. The reason must be specific and documented. Standard termination requires written notice of 30 to 90 days, depending on what’s stated in the contract.
• Resignation: Employees can resign at any point with the agreed notice. If they leave during probation and plan to exit the country, they must give at least one month’s notice. For all other cases, the default is 30 days unless a longer period is written into the contract.
• Mutual agreement: Parties can agree in writing to end a contract at any time. This should include confirmation of any final entitlements or waivers.
• Arbitrary dismissal: Where termination is unjustified or the process is not followed, compensation of up to three months’ gross salary may apply. This covers cases where the dismissal appears vague, unfair or outside the legal grounds.
• Misconduct: Immediate dismissal without notice is only allowed in clear cases of serious misconduct, such as workplace violence, intoxication, or prolonged absence without cause. These must meet the strict conditions under Article 44.
• Final payments: All dues, including salary, end-of-service benefits and leave balances, must be paid within 14 days. Delays may result in penalties or a labour complaint through MOHRE.

Red flags that suggest a closer review

Some clauses may appear routine but conflict with legal requirements or create ambiguity around core entitlements. These points often signal a contract that needs review before signing.

• Visa and insurance costs: Employers must cover the cost of work permits, residence visas, and health insurance. If a contract shifts these to the employee, even through repayment clauses, it likely breaches Articles 13 and 18 of the Labour Law.
• Overtime pay: Unless the role is classed as managerial, employees are entitled to overtime pay at 125% of the hourly rate, or 150% for late-night work between 10 p.m. and 4 a.m. (Article 19). If a contract excludes this without proper classification, it may not comply.
• Annual leave deductions: Annual leave must be paid and accrue at 30 calendar days per year after 12 months of service. Replacing it with unpaid time off or cutting the number of days below the legal minimum is not permitted.
• Unclear salary structure: Contracts must state the full salary, payment schedule, and any breakdown between basic and allowances. This is particularly important for calculating end-of-service benefits, which are based on the basic salary. If that amount is not clearly defined, later claims could be affected.

Before you sign or exit: What to clarify

Some contracts raise questions that are worth discussing. Clauses that are vague, unclear or unusually restrictive can create problems later, especially around termination or non-compete terms. End-of-service pay, in particular, often becomes a point of dispute if the salary structure is unclear or the final settlement seems incomplete.

If the contract falls under DIFC or ADGM rules, the legal framework may differ from the UAE Labour Law, so it helps to confirm which applies. For disputes involving standard mainland contracts, MOHRE is the starting point. In free zones or financial centres, issues may fall to the relevant authority or court. In any case, legal advice is worth considering when the terms are uncertain or the exit is contested.