No labour ban for resigning Abu Dhabi worker, but may have to compensate employer

I have been working on a limited contract for the past year and five months. I have just sent an email to the company management telling them I will not be coming back to work because of illness, but will let them know when I recover, and I also sent a letter of resignation. Will […]

I have been working on a limited contract for the past year and five months. I have just sent an email to the company management telling them I will not be coming back to work because of illness, but will let them know when I recover, and I also sent a letter of resignation. Will I now have a ban from working? FS, Abu Dhabi

Under the new labour-related rules that came into effect in January of this year, no one will get a ban if they decide to move jobs after a period of six months, provided they have given the proper notice. As FS has resigned, the question of illness is not relevant. There will, however, be other consequences, as FS is liable to pay a penalty for breaking the terms of a limited contract by choosing to leave before its completion. 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 the contract, whichever is shorter, unless the terms of the contract provide otherwise”. Half a month’s pay for three months is equivalent to 45 days, but this should be based on an employee’s basic salary only. The end of service gratuity will also be forfeited in accordance with Article 138 of Labour Law: “If an employee under a contract with limited period leaves his work at his own option before the end of the contract period, he shall not be entitled to end of service gratuity unless the period of his continuous service exceeds five years”.

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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