9 cases that will lead to your employment contract ending

Dubai: One of the most significant changes that will come into effect with the UAE’s new Labour Law is the switch to three-year work contracts.

While earlier contracts were largely categorised as limited or unlimited, the new labour law – Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations – stipulates that contracts shall be concluded for a definite period of time, which does not exceed three years. The employment contract may be extended or renewed once or more than once, for an equal or a shorter term, as per the new law.

Renewal of contracts

Also, Article 8 (5) of the law covers the conditions in which a contract would be considered to be extended. It states: “Where the parties continue to perform the contract after the expiration of its initial term or the completion of the agreed work without explicit agreement, the initial contract shall be deemed to have been extended on the same conditions by implication.”

However, there are certain cases that have been clearly laid out in Article 42 of the new law, in which the employment contract will be considered terminated. For example, in the event of death of the employer (with some exceptions) or employee, or if the employer goes bankrupt, or the employee is convicted in certain legal cases.

Here is a detailed look at what Article 42 of the new law states:

ARTICLE (42) - CASES OF END OF EMPLOYMENT CONTRACT

An employment contract shall terminate in any of the following events:

1. By mutual written agreement of the parties.
2. The expiration of the term of the contract, unless it is extended or renewed pursuant to the provisions hereof.
3. Upon the will of either party, subject to the provisions of this Decree-Law in relation to termination of Employment Contract and Notice Period agreed upon in the contract.
4. Employer's death unless the subject of the contract is connected with his person.
5. Worker's death or permanent total disability, as evidenced by a certificate from the Medical Institution.
6. If the Worker is convicted by a final order to a custodial penalty for a term of not less than three months.
7. The permanent closure of the establishment, pursuant to the legislation in force in the UAE.
8. If the employer becomes bankrupt, insolvent or unable to continue in business for any economical or exceptional reasons, in accordance with the conditions, controls and procedures set by the Executive Regulations and the legislation in force in the UAE.
9. If the worker does not meet the conditions for renewal of the work permit for any reason outside the control of the employer.