Two risks sit either side of a termination. Dismissing without notice on a ground that is not made out, or without the required process, converts a defensible decision into a claim. Dismissing for an unlawful reason — including retaliation for a legitimate complaint — is **arbitrary dismissal**, carrying compensation of up to three months’ salary on top of everything else owed.
Termination of Employment
Notice, summary dismissal and arbitrary dismissal
Two risks sit either side of a termination. Dismissing without notice on a ground that is not made out, or without the required process, converts a defensible decision into a claim. Dismissing for an unlawful reason — including retaliation for a legitimate complaint — is arbitrary dismissal, carrying compensation of up to three months’ salary on top of everything else owed.
| Item | Detail |
|---|---|
| Employer | [COMPANY NAME] |
| Employee | [NAME], passport [NUMBER] |
| Jurisdiction | [Mainland / Free zone] — DIFC and ADGM differ |
| Date of joining | [DATE] |
| Route | [Notice / Summary — statutory ground / Expiry of term / Mutual] |
| Reason | [STATE IT] |
| Notice given on | [DATE] |
| Notice period | [30–90] days — [worked / paid in lieu] |
| Last working day | [DATE] |
| All sums payable by | [DATE] — 14 days from the last working day |
| Gratuity payable | [Y/N] — AED [AMOUNT] |
1. Choosing the Route
| Route | When | Notice | Gratuity |
|---|---|---|---|
| Termination on notice | Any lawful reason — performance, restructuring, business need | [30–90] days, or pay in lieu | Payable |
| Expiry of the fixed term | The term ends and is not renewed | Per the contract; give reasonable warning | Payable |
| Summary dismissal | Only on a ground the Law lists, with process followed | None | [May be forfeited — take advice] |
| During probation | Within the probation period | 14 days by the employer | Not applicable under one year |
| Mutual agreement | Both parties agree terms | As agreed | Payable |
| Resignation | Employee initiated | As per contract | Payable after one year |
1.1Where there is doubt whether a summary ground is made out, termination on notice with payment of gratuity is almost always the cheaper outcome. A failed summary dismissal produces the notice pay, the gratuity, and an arbitrary dismissal claim on top.
2. Summary Dismissal
2.1Termination without notice is available only on a ground set out in the Law. The grounds are specific and exhaustive, and cover matters such as assuming a false identity, causing substantial material loss through deliberate fault, breaching safety instructions, failing fundamental duties after written warning, disclosing work secrets, conviction of an offence involving honour or honesty, attending work intoxicated, assaulting colleagues, prolonged unauthorised absence, and unlawfully exploiting the position.
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The reason recorded at the time is the strongest evidence available later. A reason reconstructed after a claim is filed reads as reconstruction. Write it down, with the supporting material, before notice is given.
Termination without notice is available only on a ground the Law lists, and only where an investigation was carried out and the employee had a genuine opportunity to respond. Employers skip the process when the misconduct seems obvious. That defect is what converts a sound decision into a successful claim.
A failed summary dismissal costs the notice pay, the gratuity, and an arbitrary dismissal claim on top. Where the ground is arguable rather than clear, terminating on notice and paying gratuity is almost always cheaper than defending the alternative.
Dismissing for an unlawful reason, including because the employee filed a legitimate complaint, attracts compensation of up to three months’ salary in addition to everything else owed. This is separate from and additional to notice and gratuity.
A dismissal shortly after an employee raises a pay or treatment complaint invites the inference of retaliation whatever the stated reason. Where the two genuinely coincide, the contemporaneous record of the real reason is the only effective answer.
All entitlements are due within 14 days of the last working day — salary, leave encashment, notice pay and gratuity. Start the computation when notice is given, not on the last day, because reconciling leave alone often takes longer than expected.
Cancellation and settlement are separate steps. Cancelling first strips the employee of status while money is outstanding, and settlement is expected as part of the cancellation. Pay, issue the statement, then cancel.
After cancellation the former employee has a limited period to remain lawfully, varying by skill category, with daily fines for overstaying. Telling them clearly costs nothing and prevents a genuinely harmful outcome for someone who has just lost their job.
Most end-of-service disputes are arithmetic nobody explained. Setting out the basic salary, the day rates and the years in the termination letter and settlement statement prevents a large share of MOHRE complaints before they start.
During probation the employer may terminate on 14 days written notice. An employee resigning during probation faces different notice requirements depending on whether they are moving to another UAE employer or leaving the country. Check the position rather than assuming symmetry.
Non-renewal is lawful, but gratuity is payable and the employee deserves reasonable warning rather than discovering it as the date arrives. Treat it as a planned termination, not an automatic event.
Unless the employee is dismissed on a summary ground or moves to another UAE employer, the cost of return to the point of recruitment falls on the employer. Confirm the position before assuming otherwise.
Notice periods, termination rules, dispute forums and end-of-service arrangements all differ in the financial free zones, where funded schemes replace gratuity. Confirm the jurisdiction before using this document at all.
Reason, investigation, hearing record, decision, notice letter, computation, settlement statement and payment evidence belong together. A complaint arrives months later, and the file is either complete or it is not — it cannot be improved afterwards.
Reflects UAE law current as of {{DATE OF USE}}. Federal Decree-Law 33/2021, the grounds for summary dismissal, notice requirements, arbitrary dismissal compensation and MOHRE dispute procedures all change — take advice on any contested termination, and note that mainland documents may require an Arabic version, which prevails.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, corporate secretary, or accountant as relevant) before you rely on it.