Can I Resign after 6 months in a UAE Unlimited Contract in the UAE?

Thinking about resigning from your job after six months under an unlimited contract in the UAE? It’s a significant decision, and it’s natural to have questions or feel uncertain about the legalities and implications. This blog aims to clarify your rights and obligations under an unlimited contract. From understanding labor laws to navigating the resignation process, we’re here to guide you every step of the way.

By the end of this post, you’ll gain insight into your options, the procedures to follow, and potential consequences, all while ensuring a smooth transition.

Understanding Unlimited Contracts in UAE

An unlimited contract is a common type of employment agreement in the UAE. Unlike limited contracts, which have a fixed duration, unlimited contracts are open-ended agreements that provide flexibility for both employers and employees.

This type of arrangement aligns well with UAE labor laws, designed to balance the rights and responsibilities of both parties. However, this flexibility also means that resignations and terminations come with specific legal obligations that you need to understand.

Key Features of Unlimited Contracts

Duration: There are no fixed timelines for this agreement, meaning the contract will remain in effect indefinitely. It will only end if either party decides to terminate it, following the terms and conditions outlined within the agreement.
Notice Periods: Both employers and employees are required to follow legally mandated notice periods when ending an employment relationship. These notice periods typically range from 30 to 90 days, depending on the terms outlined in employment contracts, company policies, or labor laws. They are designed to give both parties sufficient time to prepare for the transition, whether that means finding a replacement or securing a new job opportunity.
Gratuity Entitlement: Employees are eligible for an end-of-service gratuity, which is a financial benefit provided upon the completion of their tenure with the company. This gratuity is calculated based on the total duration of their service, ensuring that longer-serving employees receive greater recognition for their contributions.

Rights and Obligations Under Unlimited Contracts

Understanding your rights and responsibilities as both an employee and an employer is essential in managing unlimited contracts fairly and lawfully. For employees, this means knowing your entitlements, such as notice periods and job security. For employers, it involves ensuring compliance with labor laws and maintaining clear communication to avoid potential disputes. Familiarity with these aspects helps foster a transparent and balanced working relationship.

Employee Rights and Obligations

Under an unlimited contract, employees are entitled to several important rights, but they must also adhere to their obligations.

Rights of Employees

Fair Treatment: Employers are required to treat employees fairly and without discrimination, ensuring that all individuals are given equal opportunities regardless of factors such as race, gender, age, religion, or disability. This includes providing a safe and respectful workplace where everyone is treated with dignity and professionalism.
Gratuity Payments: You are entitled to an end-of-service gratuity based on how long you have worked.
Notice Period Adherence: Employers cannot terminate your contract without compensation unless the contractually agreed upon notice period has been respected.

Obligations of Employees

Respect Notice Periods: You must provide adequate notice as per your contract before resigning.
Work Ethics: Deliver your responsibilities to the standard outlined in your contract until the final day of employment.

Employer Rights and Obligations

Employers have a duty to comply with labor regulations while maintaining their operational interests.

Rights of Employers

Notice Compliance: Employers can expect employees to fulfill their notice period unless otherwise agreed upon.
Recovery of Costs: When appropriate, employers have the right to recover training or visa expenses incurred for employees.

Obligations of Employers

Transparency in Contracts: Employers must clearly outline terms and conditions in the employment contract.
Salary and Benefits Payment: Employers must pay outstanding dues, including gratuity and unused leave encashments, on termination of employment.

Resigning After 6 Months in an Unlimited Contract

If you’re seeking to resign after just six months in an unlimited contract, it’s crucial to consider certain aspects that might impact your decision.

Can You Resign After 6 Months?

Yes, employees can resign after six months under an unlimited contract. However, doing so comes with legal, financial, and professional implications.

Depending on the terms outlined in your employment contract and UAE labor laws, the following may apply:

You may need to provide a valid reason for resignation.
A specific notice period (30–90 days) is usually required.
Exiting prematurely may affect your gratuity or financial settlements.

Factors to Consider Before Resigning

Before deciding to resign, evaluate the following key factors to avoid unforeseen challenges.

Contract Terms: Review your employment agreement for any restrictive clauses.
Financial Impact: Analyze how resigning could affect your finances, especially if your company has incurred visa or relocation expenses.
Labor Ban: Depending on circumstances, a labor ban might apply when resigning. This is less common now, but it’s worth confirming.

Alternatives to Resignation

If you’re feeling stuck, outright resignation might not be your only option. Consider these alternatives for a more balanced approach.

Transfer of Employment: Explore opportunities to transfer to a different department or role within the same company.
Discuss Grievances: If dissatisfaction is the core issue, an open conversation with your manager or HR department could help address concerns.

How to Resign from an Unlimited Contract

If resignation feels like the best decision after weighing your options, follow these steps to ensure a smooth and lawful exit.

Notice Period Requirements

The first and most crucial step in resigning from an unlimited contract is serving your notice period.

Ensure the notice period length aligns with what’s stipulated in your contract—this is typically 30-90 days.
Continue fulfilling your job responsibilities during this time to maintain professionalism.

Proper Documentation and Procedures

Proper documentation ensures a seamless resignation process.

Submit a Formal Resignation Letter: Include your reason for resigning, your notice period, and your proposed last working day.
Request clearance formalities: This includes returning company assets and ensuring your exit is documented correctly.

Legal Implications of Resigning Before Completing the Notice Period

Failing to comply with your notice period could result in penalties or legal action. Employees are advised to follow the agreed-upon timelines to avoid such issues.

Employee Settlement upon Resignation

Before exiting, ensure all financial matters are resolved.

Typically, you’ll receive:

Final Salary Payment for your last month of service, including any overtime compensation.
Gratuity Settlement if eligible.
Leave Encashment for unused annual leave days.

FAQs

Will I face a labor ban for resigning after 6 months?

While labor bans are less common now following legal updates in the UAE, specific circumstances may still invoke a ban. Always check with your employer or legal advisor for clarity.

Can I leave my job without a notice period?

Leaving without serving a notice period could lead to penalties unless an agreement is reached with your employer.

Am I entitled to gratuity if I resign within 6 months?

Gratuity entitlement typically applies after at least one year of service.

Taking the Next Step

Resigning after six months of an unlimited contract in the UAE is possible but requires thoughtful planning and adherence to legal obligations. By understanding your rights, adhering to notice periods, and following proper procedures, you can handle your resignation professionally and confidently.

If you need personalized advice, consult with a labor expert or HR professional to help you make the best decision for your unique circumstances.