Electronic Signature Lawfulness for Business Termination Contract in UAE: Simplify Your Document Signing Process

How to eSign a document: electronic signature lawfulness for Business Termination Contract in UAE

Thinking about working in the UAE or hiring people in the UAE? You'll need to know about contracts and we're here to help. Hello! I'm Limited, and I'm Unlimited. We're here to tell you about the two types of contracts provided for under labor law in the United Arab Emirates. This is limited term. Me! and unlimited term. That's me! The type of contract you'll use will depend on the situation that's involved. The key differences between us are related to two issues. The ability to lawfully terminate and the payment of end-of-service gratuity. I'm used more for project-based work where there's a set time frame that everyone knows about, employer and employee. I'm more flexible because either party has the right to terminate me at any time. Of course that depends on the employer having a valid reason for terminating. Here's our lawyer friend Natalie with the details. Limited term contracts automatically terminate at the end of the agreed period. If they are terminated before that, there is effectively a breach of contract by either party. If the contract is terminated early by the employer, the employee would be entitled to a statutory payment of early termination compensation of three months total salary or less only where there are fewer than three months remaining on the contract. Where the employee terminates early, the employee would be required to pay a payment to the employer. The amounts are fixed so there's no discretion by the courts. So as soon as the termination happens the payment it is made to either party. In terms of an unlimited term contract, the contract can be terminated in theory at any time subject to there being a valid reason, particularly where the termination comes from the employer. So a valid reason is not set out in the labor law but ultimately we'd be looking for things like poor performance or misconduct subject to following a proper process before termination. If there is a valid reason there's no compensation payable. If there is no valid reason the employee would be entitled to a payment of a discretionary amount of arbitrary dismissal compensation, and that amount would be up to three months total salary. Now the other main difference between us relates to end of service gratuity. Most employees are entitled to an end of service gratuity payment on termination of employment. The only condition to that is that they have to have completed at least one year of total service. Where an employee is engaged on a limited term contract there are additional considerations. So if the employee terminates the contract early before the end of the agreed fixed term the employee will forfeit the entire amount of end of service gratuity, unless they have over five years of service. In contrast to that employees on unlimited term contracts are entitled to a payment of end of service subject to completing one year of service. They don't have to go up to five years but if they resign before completing five years their entitlement may be reduced but they wouldn't forfeit the whole amount. Who are you? I'm part-time contract I've recently been announced by the Ministry of Human Resources and Emiratization. I'm related to you unlimited so let's stick together. Al Tamimi and Company's employment department can help you figure out what type of contracts are right for your business. They can also help with a range of other employment issues It's their job!