Questions & Answers
Paying compensation in lieu of the notice period of an unlimited contract
I am an auditor employed by my current employer on an employment contract of unlimited duration. I have completed 3 years and 10 months of employment.
Recently, I received a job offer from another company and I am eager to take it up. I resigned from the employment with my current employer and served them a notice period of 30 days and agreed to pay in lieu of another 30 days as my employment contract states 60 days' notice period if any of the parties intends to terminate it.
My current employer accepted my resignation but has asked me to comply with the 60-day notice period mentioned in my employment contract.
Can my current employer restrain me from leaving the employment prior to the completion of 60 days notice period?
Dear questioner,
Thank You for contacting me!
As you have mentioned, the option to pay the compensation in lieu of the notice period is stipulated in art. 119 of UAE labor law.
Once you pay the said compensation, your employer will not be able to put any restraints or ban on you.
Please note that Article 1[4] of Ministerial Decree No. (766) of 2015 states that either party acts unilaterally to terminate the employment relation following its renewal (irrespective of the period the worker has been in the employment of the employer and irrespective of the date of renewal) provided, in all cases, that:
a. The terminating party notifies the other party in writing of his/her intent to terminate the contract in accordance with the notice period that was agreed to by the two parties, not to be less than one month and not to exceed three months. If renewal of the contract occurs prior to this decree entering into effect, and the two parties had not agreed to a notice period, then the notice period shall be three months.
b. The terminating party continues to honor the contractual obligations for the duration of the notice period.
c. The terminating party indemnifies the other party in the amount that was agreed to by the two parties, not to exceed the equivalent of three months of gross wages; if renewal of the contract occurs prior to this decree entering into effect, and the two parties had not agreed to the amount of indemnification, indemnification is set at the equivalent of three months of gross wages.
Hope the above clarifies your concern.
Thank You!
Regards,
Rajasree Ravivarma
