Worried about resigning without penalty? Concerned your employer may terminate your contract without proper notice? Confused about whether 30 days is mandatory — or if your contract clause is even valid?
Notice period disputes are one of the most common employment issues in the UAE. Many employees risk salary deductions, visa delays, or legal claims simply because they misunderstand the rules. Employers also face compensation claims when termination procedures are not properly followed.
In this guide, we clearly explain your rights and obligations under Federal Decree-Law No. 33 of 2021, including:
- The legal notice period for limited (fixed-term) contracts
- What happens if notice is not served
- Probation rules
- Early termination consequences
- Salary in lieu of notice calculation
- When termination without notice is allowed
By the end, you will understand exactly where you stand, legally and financially.
What is the Notice Period in UAE for Limited Contract?
In the UAE, the notice period for a limited (fixed-term) employment contract generally ranges from 30 to 90 days, as stated in the employment agreement. Under Federal Decree-Law No. 33 of 2021, both the employer and employee must comply with the agreed notice period when terminating or choosing not to renew the contract. If the contract does not clearly mention a notice period, the legal minimum is 30 days.
Key Rules for Limited Contract Notice Periods
1. Duration
The notice period must be clearly stated in writing and must fall between 30 and 90 days.
2. Early Termination
If either party terminates the contract without serving the full notice period, they must pay compensation in lieu of notice for the remaining unserved days.
3. Non-Renewal of Contract
Even when a fixed-term contract is not being renewed upon expiry, proper notice must still be given in line with the agreed timeframe.
4. During Probation
- Standard notice during probation is 14 days.
- If the employee resigns during probation to join another employer within the UAE, the required notice increases to 30 days.
5. Compensation Calculation
If notice is not served, the compensation typically equals the employee’s salary for the portion of the notice period that was not completed.
Important Considerations
- Mutual Agreement: The parties may agree in writing to a shorter notice period.
- Written Notice: To avoid disputes, notice should always be formally documented.
- Employer’s Responsibility: The employer must pay the employee for all work performed during the notice period.
If needed, I can also convert this into a comparison table or structure it for a legal service webpage.
What Is a Limited Contract in UAE?
A limited contract in the UAE is a fixed-term employment agreement with a clearly defined start and end date, typically lasting between 2 to 3 years. Under the updated UAE Labour Law, most private-sector employment contracts are now limited, automatically expiring on the end date unless both parties agree to renew.
These contracts offer clarity and structure for both employers and employees, outlining the expected duration of employment while allowing for flexibility in early termination, provided proper notice and any required compensation are observed. Limited contracts are commonly used for project-based roles or fixed-term positions, and if either party decides not to renew, the contract simply ends without penalties. This shift from the older “unlimited” contracts ensures greater predictability and legal compliance in the UAE employment landscape.
Need help drafting or reviewing your limited contract? Our Contract Drafting services can ensure your agreement protects your rights and complies with UAE law.
What Is the Legal Notice Period for Limited Contracts?
Under Current UAE Labour Law:
- Minimum notice: 30 days
- Maximum notice: 90 days
- Notice must be in writing
- Notice applies to both employer and employee
The exact duration depends on what is stated in the employment contract.
Facing a notice period dispute? Consult our Labour & Employment Lawyers for expert advice.
Is Notice Period Mandatory?
Yes, notice period is legally binding unless:
- Termination occurs during probation (different rules apply)
- Termination is for serious misconduct under statutory provisions
- Both parties mutually agree to waive notice
Failure to serve notice can result in compensation liability.
What Happens If Notice Is Not Served?
If an employee fails to serve notice:
- Employer may deduct salary equivalent to notice period
If employer fails to serve notice:
- Employer must pay salary in lieu of notice
Notice salary is typically calculated based on:
- Basic salary
- Or total contractual salary (depending on contract terms)
Notice Period During Probation
Probation rules differ.
Under UAE Labour Law:
- Probation cannot exceed 6 months
- If employee resigns during probation: 14–30 days’ notice may apply
- If employer terminates during probation: shorter notice may apply
After probation ends, standard 30–90 day notice applies.
Can Notice Period Be Reduced?
Yes, but only if:
- Both parties agree in writing
- Settlement terms are clearly documented
Unilateral reduction is not legally valid.
Does Notice Period Apply If Contract Expires Naturally?
No, If a limited contract reaches its end date and is not renewed:
- No notice is required for expiry
- Notice applies only to early termination
However, many contracts include non-renewal notice clauses for clarity.
Notice Period vs Early Termination Compensation
Notice period is separate from:
- Early termination compensation
- Contractual penalties
Notice ensures procedural compliance.
Compensation relates to financial consequences of premature termination.
These are often confused.
Notice Period in Limited Contract UAE
| Situation | Notice Required? | Duration |
|---|---|---|
| During probation | Yes | 14–30 days |
| After probation | Yes | 30–90 days |
| Contract expiry | No | Not required |
| Mutual termination | Depends | As agreed |
What Happens If Notice Period Is Not Served Properly?
Failure to comply with notice requirements creates legal and financial consequences.
If Employee Does Not Serve Notice
If an employee resigns without serving the contractual notice:
- Employer may deduct salary equivalent to the notice period.
- Employer may claim additional compensation if contractual breach causes demonstrable loss.
However, deductions must comply with UAE Labour Law and cannot be arbitrary.
If Employer Terminates Without Notice
If an employer terminates a limited contract without serving notice (outside legally justified grounds):
- Employer must pay salary in lieu of notice.
- Additional compensation may apply if termination is arbitrary.
When Can Termination Occur Without Notice?
Termination without notice is legally allowed only in serious misconduct cases as defined under UAE Labour Law.
Examples may include:
- Gross misconduct
- Disclosure of confidential information
- Repeated safety violations
- Serious breach of contractual obligations
Such termination must follow due process and documented investigation.
Improper dismissal without notice can be challenged.
How Is Salary in Lieu of Notice Calculated?
Salary in lieu of notice is generally calculated based on:
- The employee’s last drawn salary
- The notice period stated in the contract
Example:
- Notice period: 60 days
- Monthly salary: AED 10,000
- Employer terminates immediately
Notice compensation = AED 20,000
Contract terms may clarify whether calculation is based on:
- Basic salary only
- Or full salary package
Disputes often arise when contracts are poorly drafted.
Can Notice Period Be Extended Beyond 90 Days?
No, under UAE Labour Law:
- Notice period must not exceed 90 days.
Any clause exceeding statutory maximum may be unenforceable.
Can an Employee Work During Notice Period?
Yes, during notice period:
- Employment continues normally
- Salary remains payable
- Leave may only be taken with employer approval
Employer cannot force unpaid leave during notice unless agreed.
Can Annual Leave Be Used During Notice Period?
Annual leave during notice:
- Requires employer approval
- Cannot be imposed without consent
- May be adjusted by mutual agreement
Unused leave is typically paid out in final settlement.
What If Employer Refuses to Accept Notice?
An employer cannot legally reject a properly submitted resignation notice.
If employer:
- Refuses to acknowledge resignation
- Delays visa cancellation
- Threatens unjustified penalties
You may escalate to MOHRE.
Notice Period and Limited Contract Expiry
Important distinction:
Early Termination
Notice period applies.
Natural Expiry
Notice period does not apply unless contract specifically requires non-renewal notice.
Employees often confuse these two scenarios.
Litigation Risk in Notice Period Disputes
Notice-related disputes commonly involve:
- Salary deduction disputes
- Compensation overreach
- Misconduct allegations
- Early termination claims
Escalation path:
- MOHRE mediation
- Labour Court filing
- Litigation proceedings
Practical Compliance Checklist Before Serving Notice
Before submitting notice:
- Confirm probation status
- Confirm notice duration in contract
- Review compensation clauses
- Prepare written resignation
- Keep written evidence
- Plan visa transition
Strategic planning prevents unnecessary disputes.
Notice Period For Limited Contract – Frequently Asked Questions
What is the notice period in UAE for limited contract?
Between 30 and 90 days, as agreed in the employment contract.
Is 30 days mandatory?
30 days is the statutory minimum unless probation rules apply.
Can employer reduce my notice period?
Only with mutual written agreement.
Can I leave immediately if I resign?
Only if employer agrees or if legally justified circumstances exist.
What if contract says 120 days notice?
Clauses exceeding 90 days may not comply with statutory limits.
Legal Perspective
Notice period is not merely procedural — it affects:
- Compensation rights
- Termination validity
- Litigation exposure
- Immigration status
Both employers and employees must approach notice compliance carefully.
Read Also:
