The regulation of employment contract termination in the United Arab Emirates (UAE) is governed by Federal Decree-Law No. 33/2021 On Regulation of Labour Relations, which is in force since 2 February 2022. Federal Decree-Law No. 33/2021 aims to modernise employment practices, ensuring clarity and fairness in employer-employee relations, particularly at the point of contract termination.

This Practice Note outlines the applicable legal framework in the UAE relating to the termination of employment contracts, the types of contracts, the grounds for termination, and the employee's entitlement upon termination, including gratuity, unpaid wages, unused leave, and repatriation costs. It also explains post-termination procedures and dispute resolution mechanisms through the Ministry of Human Resources and Emiratisation (MOHRE).

This Practice Note is aimed at legal practitioners advising clients on employment law matters within the UAE, particularly from a compliance and procedural standpoint.

• MOHRE: Ministry of Human Resources and Emiratisation (this is the federal authority regulating labour relations in the UAE).

• Fixed-term contract: An employment contract with a defined start and end date, not exceeding three years (renewable).

• Unlimited contract: Previously used contract with no specified end date; now abolished and replaced with fixed-term contracts.