Kadernani & CompanyA decision to terminate employment can become a significant business risk before the employee ever leaves the workplace.
For employers in the UAE, a commercially understandable reason to restructure a department, remove a senior executive, address misconduct or respond to continuing performance concerns is only the beginning of the analysis.
The business must identify the correct employment regime, determine the legal basis for termination, comply with the applicable notice or disciplinary requirements, calculate the final settlement correctly and manage the employee's departure without creating unnecessary litigation, confidentiality or operational exposure.
This becomes particularly important for senior employees who hold customer relationships, access confidential information, possess signing authority or occupy positions across several group companies.
The strongest termination process therefore combines legal compliance, documentary discipline, financial accuracy and operational control.
Employment Termination in the UAE Starts With the Correct Legal Regime
There is no single UAE employment law governing every employee working in the country.
For most mainland private-sector employment relationships, the principal legislation is Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, together with its Executive Regulations and subsequent amendments.
That should not be assumed to govern every employment relationship.
The Dubai International Financial Centre has its own Employment Law.
Abu Dhabi Global Market operates under the ADGM Employment Regulations 2024, which have applied since 1 April 2025 and replaced the previous 2019 Regulations.
Other free zones may administer work permits, immigration and employment documentation through their own authorities while federal labour legislation remains relevant to the underlying employment relationship.
Before preparing a termination letter, the employer should therefore confirm the employing entity, place of employment, employment contract, applicable employment legislation, work permit and visa sponsorship.
This sounds elementary.
In corporate groups, it frequently is not.
An executive may be sponsored by one UAE entity, provide services to several group companies, hold directorships elsewhere and report operationally to an overseas parent company.
The termination exercise should identify all of those relationships before any notice is issued.
The Employment Contract Still Matters
Mandatory employment law establishes the minimum framework.
The individual contract may create additional rights or obligations.
The contract should therefore be reviewed for matters including the agreed notice period, remuneration structure, variable compensation, confidentiality, intellectual-property ownership, restrictive covenants, contractual benefits and any agreed procedure dealing with disciplinary or performance issues.
Senior executives may also have separate documents dealing with bonuses, long-term incentives, equity awards, carried interests, board appointments or group benefits.
A termination letter cannot be drafted properly until the employer knows which contractual relationships it is actually ending.
Ordinary Mainland Termination Is Not the Same as Summary Dismissal
One of the most important distinctions under the mainland regime is between an ordinary termination with notice and dismissal without notice under Article 44.
Under Article 43 of the Labour Law, either party may terminate an employment contract for a legitimate reason, provided written notice is given and the agreed notice period complies with the statutory framework.
For most employees outside probation, that notice period must be between 30 and 90 days.
The employer should therefore avoid treating every difficult departure as a misconduct dismissal.
Where the business simply wishes to discontinue a role, reorganise a function or end an employment relationship for another legitimate reason, an ordinary notice termination may provide a cleaner and more proportionate route.
Trying to convert an ordinary commercial termination into a misconduct case merely to avoid notice can create substantially greater risk.
Restructuring and Redundancy Should Be Documented Accurately
The UAE federal Labour Law does not operate through the same statutory redundancy regime found in certain other jurisdictions.
There is no universal requirement for a formal redundancy consultation exercise before every operational termination.
That does not mean documentation is unimportant.
Where the business is eliminating positions because of restructuring, automation, consolidation, outsourcing or financial pressure, the internal record should explain the genuine commercial decision.
If several employees perform similar functions and only some roles are being removed, the employer should be able to explain how the affected positions were selected.
The objective is not to recreate a foreign redundancy procedure unnecessarily.
It is to ensure that the employer's stated explanation corresponds with what actually happened.
A restructuring decision becomes more difficult to defend where internal emails describe one rationale while the employee receives another.
Do Not Invent a Performance Case Where the Real Reason Is Restructuring
This is a common source of avoidable disputes.
An employer may decide commercially that a particular management layer is no longer required but attempt to present the termination as poor performance because management believes that sounds more defensible.
That can have the opposite effect.
If the contemporaneous record contains strong performance reviews, recent bonuses or positive management correspondence, a sudden performance explanation may undermine the employer's credibility.
The legal rationale and the business rationale should therefore be aligned.
Where the position is genuinely being eliminated, say so internally and manage the termination consistently with that decision.
Where performance is genuinely the issue, the employer should be able to show the evidence supporting that conclusion.
Performance Management Is Valuable Evidence, Not a Universal Statutory Formula
Mainland UAE law does not require every ordinary performance-related termination to follow an identical performance-improvement-plan process.
Nevertheless, documented performance management can be extremely useful.
Where concerns have developed over time, the employer should ordinarily be able to identify what standard was expected, what concerns were raised, what feedback was given and whether the employee had a reasonable opportunity to respond.
For senior employees, this can include board expectations, financial targets, compliance obligations, leadership responsibilities and project deliverables.
A documented process serves several purposes.
It gives the employee clarity.
It allows management to determine whether the problem can be corrected.
And if termination ultimately follows, it creates contemporaneous evidence showing that the decision was not invented after the event.
Article 44 Summary Dismissal Requires a Much Higher Level of Discipline
Dismissal without notice under Article 44 should be treated separately.
The provision contains specified circumstances in which an employer may dismiss a worker without notice.
These include particular forms of dishonesty, serious misconduct, certain safety breaches, specified unauthorised absence, serious disclosure of work secrets, misuse of position and other enumerated conduct.
The employer cannot simply label conduct “gross misconduct” and assume Article 44 has been satisfied.
The statutory ground must fit the facts.
More importantly, Article 44 requires the employer to conduct a written investigation, and the dismissal decision must be written, reasoned and delivered to the worker.
Certain grounds contain their own additional requirements.
For example, where the employer relies on repeated failure to perform basic duties, the statutory framework requires the relevant written investigation and warning process before the dismissal ground is established.
A summary dismissal should therefore begin with the statute, not the company's preferred characterisation of the conduct.
The Investigation Should Preserve Fairness and Evidence
A serious misconduct investigation should identify clearly what is alleged.
Relevant documents should be preserved.
The employee should be given the opportunity required by the applicable process to respond to the allegation.
Witness evidence, system records, access logs, emails, CCTV or financial records should be secured where relevant.
The investigator should distinguish suspicion from evidence.
The final decision should then explain why the proven facts satisfy the particular ground relied upon.
This is particularly important where the employer intends to deny notice pay because it relies on Article 44.
If the statutory basis later fails, the financial and litigation consequences can extend beyond the termination itself.
Internal Disciplinary Policies Should Be Followed
An employer that has voluntarily created a detailed disciplinary procedure should consider it before acting.
A company should not publish a policy promising an investigation, written allegations and an appeal process, then ignore that procedure when a senior manager is involved.
Whether every element of the policy creates an independently enforceable contractual right will depend on the documents and circumstances.
But unexplained departure from the company's own process can weaken the overall position.
Policies should therefore be drafted realistically in the first place.
An employer should not promise procedural steps that it has no intention of following when a serious case arises.
Probation Has Its Own Rules
Termination during probation should not be handled under the ordinary post-probation notice rules.
Under the mainland Labour Law, an employer terminating an employee during probation must generally provide at least 14 days' written notice.
Employee resignation during probation can trigger different notice requirements depending on whether the employee intends to move to another employer inside the UAE or leave the State.
Those rules should be reviewed against the actual facts.
Probation should also be genuine.
A business should not assume it can indefinitely restart probation through internal transfers or revised paperwork where the statutory limit has already been reached.
The termination process should identify the actual date employment began and whether the employee remains legally within probation.
Notice Pay Should Be Calculated From the Correct Wage
Under the mainland regime, the notice allowance is calculated by reference to the employee's wage rather than merely basic salary.
This distinction is important.
End-of-service gratuity generally uses basic wage.
Notice compensation follows a different statutory calculation.
Payroll and legal teams should therefore avoid using one salary figure mechanically for every component of the settlement.
Each entitlement should be calculated according to the rule that governs it.
The Employment Relationship Continues During Notice
Where ordinary notice is given, the employment relationship remains in force during the notice period.
The employee remains entitled to the applicable wage and contractual benefits.
The employer may require the employee to continue working.
The parties can also agree appropriate arrangements concerning release from duties while preserving the employee's notice-period rights.
For senior or sensitive departures, the employer may conclude that the employee should not continue interacting with customers, accessing confidential systems or negotiating transactions during notice.
That can be commercially sensible.
The mechanism should nevertheless preserve the employee's legal and contractual entitlements rather than becoming an informal suspension without pay.
“Garden Leave” Should Not Be Used as a Label Without Reviewing the Regime
International employment contracts frequently use the expression “garden leave.”
The concept should not be imported mechanically from another jurisdiction.
Under mainland UAE law, the employer and employee's rights during the notice period should be assessed against Article 43 and the employment contract.
DIFC expressly provides a more developed statutory basis permitting an employer in relevant circumstances to require an employee not to attend work or perform duties during notice.
Different legal regimes can therefore produce similar commercial outcomes through different legal mechanisms.
The drafting should follow the applicable law.
DIFC Termination Rules Are Materially Different
Employment in DIFC should not be terminated using a mainland template.
Under the DIFC Employment Law, the statutory minimum notice period depends on length of service.
Employees with less than three months' continuous service generally have a minimum seven-day period once the relevant statutory conditions apply.
Employees with more than three months but less than five years' service generally have a minimum 30-day notice period.
Employees with more than five years generally have a minimum 90-day notice period.
The DIFC regime also contains specific provisions concerning payment in lieu, absence from duties during notice, termination for cause, Qualifying Scheme contributions and termination payments.
This is a materially different framework from the federal 30-to-90-day notice model.
A company operating both inside and outside DIFC should therefore maintain separate termination procedures.
DIFC End-of-Service Benefits Require the Qualifying Scheme Framework
Traditional UAE gratuity terminology is also insufficient for most DIFC employees.
The DIFC's end-of-service regime operates through approved Qualifying Schemes, with the DIFC Employee Workplace Savings system commonly known as DEWS forming an important part of the framework.
Employer contributions generally operate through the statutory percentage structure linked to basic wage and service.
Historic gratuity accrued before the Qualifying Scheme commencement date may also require separate treatment.
The final settlement for a DIFC employee should therefore verify both the employer's direct payment obligations and any outstanding Qualifying Scheme contributions.
A mainland gratuity spreadsheet should not be reused for a DIFC employee merely because the employee works in Dubai.
ADGM Has Had a New Employment Regime Since April 2025
ADGM also requires separate treatment.
The ADGM Employment Regulations 2024 became effective on 1 April 2025 and replaced the former Employment Regulations 2019.
The new regime addresses matters including notice, termination for cause, discrimination, victimisation, protected disclosures, end-of-service gratuity, remote employees and payment following termination.
Under the current ADGM framework, an employee who has been continuously employed for at least one month generally receives a statutory minimum of seven days' written notice where service is less than three months and 30 days where service is three months or more, subject to the statutory exceptions and any longer contractual period.
Payment in lieu also requires analysis under the ADGM provisions rather than assumption based on mainland practice.
For groups employing personnel in Abu Dhabi both onshore and within ADGM, separate templates are therefore essential.
ADGM Final Payment Can Carry Significant Late-Payment Consequences
The current ADGM regime contains a particularly important late-payment provision.
Amounts such as wages and other sums falling within the statutory rule are generally required to be paid within 14 days of the Termination Date.
Where the employer fails to comply, the legislation can expose the employer to a daily-wage penalty, subject to statutory thresholds, exceptions and the applicable cap.
This gives ADGM termination payments a different risk profile from an ordinary payroll delay.
The finance team should therefore receive the settlement figures early enough to fund and process them within the statutory period.
Mainland Final Settlement Must Generally Be Paid Within 14 Days
For mainland employees, Article 53 requires the employer to pay the employee's wages and other entitlements due under the Labour Law, its implementing resolutions, the employment contract or the establishment rules within 14 days from the end of the employment contract.
This deadline should be treated as a termination workstream in its own right.
The company should therefore calculate the settlement before the final day where possible.
Waiting until after employment ends to determine which commissions, expenses, leave days or gratuity amounts are due can create unnecessary pressure and disputes.
Final Settlement Is More Than Gratuity
A compliant exit calculation can involve several components.
Depending on the employee and the reason for termination, the settlement may include outstanding salary, notice compensation, accrued annual leave, end-of-service benefits, earned commissions, contractual bonuses, approved expenses and other benefits that have become legally or contractually payable.
Not every employee will be entitled to every category.
The legal team and finance department should determine the basis for each component separately.
A single settlement number without an underlying calculation invites disagreement.
Traditional Mainland Gratuity Uses Basic Wage
For qualifying foreign full-time workers under the ordinary mainland gratuity system, statutory end-of-service gratuity is generally calculated using the employee's last basic wage.
An employee who has completed at least one year of continuous service is generally entitled to 21 days' basic wage for each year of the first five years and 30 days' basic wage for each additional year.
Partial years are calculated proportionately once the employee has completed at least one year.
Unpaid absence is excluded from the service calculation in accordance with the statutory rules.
The total statutory gratuity is capped at two years' wage.
This calculation should be distinguished from contractual benefits that an employer may have promised above the statutory minimum.
The Voluntary Savings Scheme Changes the Analysis
Traditional gratuity is no longer the only federal end-of-service model available to employers.
Cabinet Resolution No. 96 of 2023 introduced the voluntary alternative end-of-service Savings Scheme.
Participating employers can register selected eligible employees and make monthly contributions into an approved investment fund instead of continuing to accrue traditional gratuity for the employee's post-enrolment service.
For full-time employees, the basic contribution rates generally correspond to 5.83% of monthly basic wage during the first five years of continuous service and 8.33% after five years.
Historic gratuity accrued before the employee joined the scheme is preserved and dealt with according to the applicable rules.
An employer using the Savings Scheme should therefore not calculate termination benefits as though the employee had remained entirely under the traditional gratuity system.
The date of enrolment matters.
Do Not Forget Pension-Covered Employees
UAE and certain GCC nationals can fall within statutory pension and social-security regimes rather than the ordinary foreign-worker gratuity framework.
The payroll team should therefore identify nationality and pension registration before applying an expatriate gratuity calculation.
This is particularly important in DIFC, where the legislation also contains specific treatment of GCC pension contributions and Qualifying Scheme top-ups in defined circumstances.
End-of-service calculations should begin by asking which statutory system applies to the individual employee.
Variable Compensation Is Frequently the Most Difficult Part of the Exit
Salary and statutory gratuity are often straightforward.
Bonuses and commissions are not.
A senior employee may leave while a large transaction is pending, after having substantially completed the work necessary to earn a commission but before the contractual payment date.
A bonus plan may describe an award as discretionary while historic company practice suggests a more structured entitlement.
A sales commission may depend on customer payment rather than contract execution.
The correct analysis should begin with the actual incentive plan, employment contract, prior amendments and evidence of company practice.
Terms such as “discretionary” should not be treated as a substitute for reviewing how the scheme genuinely operates.
Accrued Annual Leave Should Be Verified Carefully
Unused annual leave can form part of the final settlement.
Payroll should confirm the employee's accrued balance, leave already taken and the correct statutory or contractual calculation.
This becomes more complicated where employees have carried leave across several years or where internal HR systems do not match signed records.
Senior employee exits are not the ideal time to discover that leave records have not been reconciled.
The company should maintain reliable leave records throughout employment.
Deductions From Final Settlement Should Have a Legal Basis
An employer should not treat the final settlement as a convenient opportunity to recover every amount it believes the employee owes.
Deductions require a lawful or contractual basis and must comply with the applicable legislation.
Potential issues may include employee loans, advances, damage claims, training arrangements, unreturned property or other debts.
The legal team should distinguish between an amount clearly recoverable through deduction and a disputed employer claim that may require a separate legal process.
The company should be particularly cautious about withholding the entire settlement because a device, document or asset has not yet been returned.
The employee's mandatory statutory rights do not disappear because another dispute exists.
Work Permit and Visa Cancellation Should Be Coordinated With the Exit
Employment termination, final payment and immigration cancellation are connected but legally distinct steps.
The employer should coordinate:
the termination date, final salary, end-of-service calculation, work permit cancellation, residence status and handover of company property.
These steps should be sequenced carefully.
An employee should not be pressured to sign inaccurate acknowledgments merely to obtain cancellation documents.
Likewise, employers should ensure that the immigration process is not left unresolved long after the employment relationship has ended.
Free-zone and financial-free-zone entities should follow the procedures of their relevant authority.
Corporate Positions May Survive the Employment Contract
A senior employee may also be:
a director, manager, authorised signatory, attorney, bank signatory or representative before a government authority.
Ending the employment contract does not automatically remove every separate corporate authority.
A coordinated departure should therefore identify all offices and delegations held by the employee.
This may require board or shareholder resolutions, revocation of powers of attorney, bank mandate changes, regulatory notifications or amendments to corporate records.
The company should avoid a situation in which an executive has left employment but remains legally capable of signing for the business.
IT Access Should Be Planned Before the Termination Meeting
For sensitive roles, access-control planning should occur before notice is communicated.
The company should identify access to email, cloud systems, accounting platforms, CRM systems, customer databases, source code, document repositories, bank platforms and administrative credentials.
The response should be proportionate.
A departing employee should not automatically be treated as dishonest.
But the organisation should not leave critical systems exposed while it decides how to manage access after the meeting.
Legal, HR and IT teams should agree the sequence in advance.
Confidential Information Requires More Than a Reminder Letter
Senior employees can hold valuable information concerning pricing, customers, tenders, technology, transactions and internal strategy.
The federal Labour Law itself imposes duties concerning work secrets and confidential information.
The employment contract may contain additional obligations.
The employer should therefore identify which information is genuinely sensitive, whether the employee had access to it and whether any company records have been transferred to personal devices or accounts.
The exit process can include a targeted reminder of continuing confidentiality obligations and return or deletion of company information.
Generic statements that “everything is confidential forever” are less useful than identifying the categories of information the company genuinely needs to protect.
Non-Compete Clauses Should Be Assessed Rather Than Threatened Automatically
The federal Labour Law permits post-termination non-compete restrictions in appropriate circumstances where the employee's role gives access to customers or work secrets.
The restriction must satisfy the statutory requirements and be limited appropriately by time, place and type of work.
Under the federal framework, the maximum restricted period is generally two years after termination.
That does not mean every two-year restriction is enforceable.
The restriction must still be justified and drafted around a legitimate business interest.
The circumstances in which employment ended can also affect enforceability.
Before sending a threatening non-compete letter, the employer should therefore review the actual clause, employee role and statutory conditions.
Confidentiality or non-solicitation protections may sometimes address the real business risk more effectively.
Customer and Employee Non-Solicitation Should Be Reviewed Separately
Non-solicitation provisions can protect different interests from a general non-compete.
A sales director moving to a competitor may present concern because of customer relationships.
A senior manager may be able to recruit an entire team.
The contract may contain specific restrictions addressing those risks.
The legal team should identify precisely what the employee is prohibited from doing and for how long.
A broad demand that a former employee avoid all contact with anyone connected to the company may be difficult to justify and can dilute a stronger, narrower restriction.
The Employer Should Distinguish Security From Punishment
When a relationship breaks down, operational measures can become emotionally charged.
Removing access to sensitive systems can be appropriate.
Publicly embarrassing the employee, circulating accusations or disrupting personal accounts is not a legitimate security measure.
Internal communications should be limited to what relevant staff need to know.
External customers should usually receive a neutral business-continuity message rather than detailed allegations concerning the employee.
This protects both the company and the integrity of any investigation.
Article 47 Unlawful Termination Is Narrower Than the Old UAE Concept of Arbitrary Dismissal
The current Labour Law should be described accurately.
Under Article 47, employer termination is unlawful where it occurs because the employee submitted a serious complaint to the Ministry or brought a case against the employer that proved valid.
Where the competent court finds unlawful termination under that provision, it may award fair compensation taking account of the work, damage and length of service.
The statutory compensation cannot exceed three months' wages calculated according to the employee's last wage.
That compensation is additional to other entitlements such as notice allowance and end-of-service gratuity where applicable.
The current Article 47 regime should not be described simply by relying on older concepts developed under the former Labour Law.
Discrimination and Retaliation Require Separate Consideration
The federal Labour Law also contains separate protections concerning discrimination.
A termination decision should therefore be reviewed for evidence suggesting that the real reason is linked improperly to a protected characteristic or exercise of a statutory employment right.
The internal documentary record matters.
An employer may have a legitimate commercial reason for restructuring but create unnecessary exposure through emails showing that selection decisions were influenced by irrelevant personal factors.
Decision-makers should be told before the process begins which factors can legitimately form part of the selection analysis.
Leave-Related Terminations Require Particular Care
Employees may be absent under statutory maternity, parental, sick or other protected leave arrangements.
The existence of leave does not automatically make every employment decision impossible.
However, the employer should establish that the reason for the decision is legally defensible and not simply retaliation for the employee using a statutory entitlement.
This becomes particularly important where restructuring happens while several employees are absent.
The selection criteria should be capable of explanation independently of the leave itself.
A Mutual Separation Can Sometimes Produce a Better Result
Not every termination needs to end in an adversarial process.
For senior employees, founders transitioning out of the business, sensitive compliance cases or situations involving disputed compensation, a negotiated separation can provide greater certainty.
The agreement may address payment, notice arrangements, handover, confidentiality, announcements, company property, continuing obligations, visa cancellation and dispute settlement.
Any release should be drafted with the applicable employment regime in mind.
The employer should not assume that a broad contractual waiver automatically eliminates mandatory statutory rights.
A settlement works best when it resolves genuine uncertainty rather than attempting to contract out of rights the law does not permit the employee to waive.
Settlement Payments Should Be Separated From Existing Entitlements
Where an employer offers an additional payment in return for an agreed departure, the documentation should distinguish that payment from amounts the employee is already entitled to receive.
Statutory wages, accrued leave, gratuity or notice compensation should not be presented as though they are consideration for surrendering separate claims where they are already due.
A settlement schedule should therefore identify the components clearly.
This transparency reduces later arguments about what the employee actually received in exchange for the agreement.
Senior Executive Terminations Require a Wider Transaction Review
A chief executive, chief financial officer or other senior executive may participate in arrangements extending well beyond employment.
The departure may affect:
share options, incentive plans, shareholder agreements, board seats, signing authority, loans, guarantees, carried interest and intellectual-property arrangements.
The company should therefore avoid treating the termination simply as an HR exercise.
Legal, finance, corporate-secretarial and tax teams may all need to participate.
This is particularly true following an acquisition or shareholder dispute where the employee also holds equity.
Termination During an M&A Transaction Requires Coordination
Acquisitions frequently trigger management changes.
The buyer may want key employees to remain temporarily.
The seller may have promised transaction bonuses.
A change-of-control clause may create additional benefits.
Retention arrangements may overlap with ordinary termination entitlements.
The SPA, disclosure materials and employment documents should therefore be reviewed together before management exits are announced.
A post-acquisition termination carried out without checking the transaction documents can create a claim against both the employer and the seller depending on how the risk was allocated.
Group Restructuring Requires Consistent Treatment Across Entities
Multinational groups often restructure several UAE entities at the same time.
The danger is applying one global termination model to every employee.
A mainland employee, DIFC employee and ADGM employee may sit in the same reporting line but have materially different legal rights concerning notice, benefits and procedure.
The group can use one commercial restructuring plan.
The legal implementation should still be jurisdiction-specific.
Central HR teams should therefore identify legal regime as one of the first data points in any UAE workforce reduction exercise.
Labour Complaints Should Be Factored Into the Exit Strategy
For mainland employment disputes, the Ministry of Human Resources and Emiratisation plays a central role in the dispute process.
Employment claims are generally first brought through MOHRE.
Under the current framework, the Ministry has authority to issue an executable final decision where the value of the claim does not exceed AED 50,000, as well as in specified disputes concerning failure to comply with an amicable settlement decision.
The statutory framework also provides a short period for challenging such a Ministry decision through the prescribed court process.
For higher-value disputes that cannot be settled amicably, the matter proceeds through the statutory referral route to the competent judiciary.
An employer should therefore assess a termination not only by asking whether it believes its position is correct but also by considering how the evidence will appear when presented to MOHRE or the relevant court shortly afterward.
Employment Claims Are Subject to Limitation Periods
The current federal framework also imposes a limitation period on labour claims arising from rights under the Labour Law.
This should be checked whenever an older termination dispute resurfaces.
Limitation is not a reason to destroy records immediately after the statutory period appears to have passed.
Companies may have longer retention obligations under other employment, tax, corporate, regulatory or litigation requirements.
Record-retention policy should be coordinated rather than based on one limitation provision.
The Termination Letter Should Be Clear Without Becoming an Unnecessary Legal Submission
A termination letter should perform its purpose.
For ordinary notice termination, it should identify the termination decision, applicable notice arrangements, termination date and practical next steps.
Where the law or contract requires reasons, those reasons should be stated appropriately.
Where Article 44 is relied upon, the statutory requirements concerning investigation and the written reasoned decision are particularly important.
The employer should avoid turning every termination letter into an unnecessarily accusatory legal brief.
Statements made in the letter can become evidence.
Precision is more useful than emotion.
The Exit Meeting Should Match the Written Position
HR and management should know what has been decided before meeting the employee.
An employer should avoid issuing a formal restructuring termination letter while the manager tells the employee that the real problem is misconduct.
Likewise, an Article 44 dismissal should not be described verbally as a convenient cost-saving decision.
The written and oral explanations should tell the same story.
The individuals conducting the meeting should also know what they are authorised to offer.
An informal promise of additional compensation made during a difficult conversation can become its own dispute.
Internal Communications Should Be Written With Litigation in Mind
This does not mean every internal email should sound like a court pleading.
It means decision-makers should communicate accurately.
Phrases such as “we need to get rid of him somehow” or “find a reason to fire her” can transform a manageable employment decision into a much more difficult evidential problem.
Internal documents should record the genuine commercial concern.
Where legal advice is being sought, communications should be managed in a way appropriate to the applicable privilege framework.
Employment disputes are often decided as much by contemporaneous internal records as by the termination letter.
A Practical UAE Employment Termination Review
Before terminating an employee, management should confirm the governing employment regime, the employing entity, the reason for termination, the applicable notice period, whether any Article 44 ground is genuinely engaged, what process has already been followed, whether protected complaints or discrimination concerns exist, what amounts must be paid, whether the employee participates in a pension or alternative savings scheme, which corporate authorities must be revoked and how confidential information and systems access will be protected.
For senior employees, the review should also address equity, directorships, powers of attorney, banking mandates, incentives and customer communications.
That work is usually considerably easier before the termination meeting than afterward.
A Good Termination Process Protects Both the Employer's Decision and the Business
The legal objective is not to make dismissal impossible.
UAE law permits employment relationships to end.
The objective is to ensure that the employer uses the correct legal route and understands the consequences.
An ordinary notice termination should not be transformed unnecessarily into a misconduct dispute.
A genuine Article 44 case should not be weakened through an inadequate investigation.
A restructuring should be documented as a restructuring.
A final settlement should be calculated under the correct statutory system.
And the employee's departure should not leave behind active bank authority, uncontrolled customer communications or confidential information.
Employment termination is therefore both a legal process and a governance process.
When handled well, it allows the business to make difficult personnel decisions while controlling financial and litigation exposure.
When handled poorly, the original employment issue can become less serious than the dispute created by the termination itself.
How Kadernani & Company Legal Consultants Can Assist
Kadernani & Company Legal Consultants advises UAE and international employers, corporate groups, family businesses, founders and senior executives on employment termination, workforce restructuring and contentious employment matters across the UAE.
Our employment work includes advice concerning mainland UAE termination under Federal Decree-Law No. 33 of 2021, DIFC Employment Law, ADGM Employment Regulations 2024, executive departures, disciplinary investigations, Article 44 dismissals, restructuring, notice, gratuity and Savings Scheme issues, restrictive covenants, confidentiality and employment disputes.
For employers considering termination, the first stage should be to identify the correct legal regime and the genuine reason for the proposed decision.
A mainland employee, DIFC employee and ADGM employee may work for the same corporate group but be subject to materially different notice and end-of-service requirements.
The process should therefore be jurisdiction-specific rather than driven solely by a global HR template.
Where misconduct is alleged, we can assess whether the evidence is capable of satisfying the relevant statutory termination ground and help structure the investigation, employee response and decision-making process before irreversible action is taken.
For ordinary notice terminations, restructuring and performance cases, the focus is different.
The employer should understand the applicable notice arrangements, contractual benefits, documentary record and potential challenge risk without creating procedural requirements that UAE law does not actually impose.
Final settlement should be calculated as part of the legal strategy rather than after the termination has been announced.
This includes identifying the correct treatment of salary, notice compensation, annual leave, commissions, bonuses, traditional gratuity, pension rights or alternative Savings Scheme entitlements.
For senior executives, the review should extend beyond employment.
Board positions, powers of attorney, bank mandates, corporate signatory rights, equity arrangements, confidentiality, customer relationships and access to sensitive information may all need to be addressed as part of one coordinated exit.
Where a negotiated separation is preferable, the settlement should distinguish mandatory existing entitlements from additional commercial consideration and address the practical implementation of the departure, including handover, announcements, continuing obligations and immigration cancellation.
If a dispute cannot be avoided, the evidentiary file should already explain what happened, why the employer acted and how the termination complied with the applicable law.
For mainland claims, the current MOHRE dispute process should also be considered when evaluating litigation exposure and settlement strategy.
A termination decision cannot eliminate every possibility of challenge.
It can, however, be structured so that the employer's legal explanation, commercial rationale, financial settlement and internal records all point in the same direction.
For boards and senior management, the practical test is straightforward:
before the employee is notified, the business should know why the relationship is ending, which legal regime applies, what process is required, what the exit will cost and what needs to happen immediately afterward to protect the company.
Where those answers are not yet clear, a senior-led employment termination review before notice is issued is usually considerably less costly than trying to repair the process after the dispute has begun.