Employment Termination During a Crisis: Your Rights Under UAE Labour Law

If you are laid off, placed on unpaid leave, or have your salary cut during the current crisis, your rights under UAE Labour Law remain fully intact — force majeure does not waive your employer’s statutory obligations. Under Federal Decree-Law No. 33 of 2021, employers must still pay proper notice, settle end-of-service gratuity, cash out accrued leave, and complete visa cancellation procedures — regardless of the reason for termination. A salary reduction requires your written consent; without it, the cut is unlawful and you can file a complaint with MOHRE. No ministerial resolution equivalent to the COVID-era temporary measures has been issued for the current conflict as of March 2026.

This guide covers the lawful grounds for termination during a crisis, what employers can and cannot do with salaries and leave, the specific entitlements you are owed at termination, what happens to your visa and grace period after job loss, how to file a dispute with MOHRE, and the critical differences between mainland, free zone, DIFC, and ADGM employment frameworks.

Can Your Employer Terminate You Because of the Crisis?

Article 42 of the UAE Labour Law lists the lawful grounds for terminating an employment contract. These include mutual written agreement, contract expiry without renewal, termination by either party with proper notice, death of the employee, permanent disability rendering the employee unable to work, and — critically — “the permanent closure of the establishment in accordance with UAE legislation.” This last ground is the one most relevant to crisis-related terminations.

Employer Action	Lawful?	Conditions
Terminate with proper notice citing business closure	Yes	Business must genuinely and permanently close; all statutory entitlements must be paid
Terminate with proper notice citing redundancy/restructuring	Yes	Must serve contractual notice period (30–90 days); pay all entitlements; cannot be retaliatory
Terminate without notice citing “force majeure”	Risky	No explicit force majeure termination ground in Art. 42; employer may be liable for arbitrary dismissal compensation
Reduce salary without employee consent	No	Written employee consent required for any salary change; unilateral cuts violate Labour Law
Place on unpaid leave without employee consent	No	No statutory basis for unilateral unpaid leave; requires mutual written agreement
Reduce working hours and proportional pay with consent	Yes	Must have written agreement; updated contract filed with MOHRE

The key point: unlike the COVID-19 period when MOHRE issued Ministerial Resolutions (including Resolution No. 279 and No. 280 of 2020) that explicitly permitted temporary salary reductions, unpaid leave, and reduced working hours as graduated steps during the pandemic, no equivalent ministerial decision exists for the current conflict. This means employers cannot cite an official government directive to justify salary cuts or forced unpaid leave. Any changes to employment terms require the individual employee’s written consent.

What Employers Cannot Do

Unilateral Salary Reduction

Under UAE Labour Law, the salary stated in your registered employment contract is a contractual obligation. Reducing it without your written consent constitutes a breach of contract. You are not legally bound to accept any pay cut. If your employer reduces your salary without your agreement, you can file a complaint with MOHRE through the Wage Protection System. MOHRE monitors salary payments electronically — if your WPS-recorded salary differs from your contracted amount, this creates automatic evidence of the violation.

If your employer asks you to accept a temporary salary reduction, the process should follow these steps to be lawful: the employer explains the business reason in writing, you review and either accept or decline in writing, if you accept the reduction a contract amendment is signed by both parties, and the amended contract is updated on the MOHRE portal. If any of these steps are skipped — particularly your written consent — the reduction is unlawful.

Forced Unpaid Leave

There is no provision in Federal Decree-Law No. 33 of 2021 that permits an employer to place an employee on unpaid leave unilaterally. Unpaid leave can only be taken by mutual written agreement. An employer who sends employees home without pay and without their consent is breaching the employment contract. The employee retains the right to full salary for the period and can file a complaint with MOHRE.

Withholding Passport or End-of-Service Dues

Passport confiscation is a criminal offence in the UAE regardless of circumstances. End-of-service benefits — gratuity, accrued leave pay, notice period compensation — must be settled within 14 days of the last working day. The crisis does not extend this deadline. Under the 2024 amendments, MOHRE can order employers to continue paying salary for up to two months while disputes are being resolved.

What You Are Owed If Terminated

Whether termination is initiated by the employer or agreed mutually, the following entitlements apply in full. Force majeure, business difficulty, or crisis conditions do not reduce or eliminate any of these statutory rights:

Entitlement	Calculation	Notes
Notice period pay	30–90 days’ salary (as per contract)	If employer terminates without serving notice, they must pay salary in lieu
End-of-service gratuity	21 days’ basic salary per year (first 5 years); 30 days per year (after 5 years). Capped at 2 years’ total salary	Based on last basic salary only (excludes allowances); requires minimum 1 year of service
Accrued unused leave	Basic salary ÷ 30 × unused leave days	Calculated on basic salary, not total package
Unpaid salary	Full outstanding amount	Including any salary arrears, overtime, commissions owed
Repatriation ticket	Economy class ticket to home country	Employer’s obligation unless employee joins a new UAE sponsor
Arbitrary dismissal compensation	Up to 3 months’ total salary	Court-awarded if termination is proven arbitrary under Art. 47

Settlement deadline: All final dues must be paid within 14 days of the last working day. Delay is not merely an administrative inconvenience — it is a violation that exposes the employer to MOHRE penalties and potential court enforcement.

What Happens to Your Visa After Termination

When employment ends, the employer must cancel your work permit (through MOHRE) and residence visa (through ICP or GDRFA). The standard grace period after job loss applies:

Visa Category	Grace Period
Standard employment visa (skilled worker, levels 1–3)	180 days
Standard employment visa (other levels)	60 days
Golden Visa holder who loses qualifying employment	Visa remains valid (not tied to employer)
Green Visa holder	180 days

During the grace period, you can seek new employment and transfer your visa to a new sponsor, change your visa status to another category (e.g., freelance, investor), or exit the UAE. If you do not regularise your status before the grace period expires, overstay fines of AED 50 per day begin accumulating. Force majeure does not extend the grace period beyond what the law provides.

If you have dependants on your visa, their residence permits are directly affected by your termination. They must either transfer to an alternative sponsor, obtain their own independent visa, or leave the UAE within the applicable grace period.

Unemployment Insurance (ILOE): Can You Claim?

The UAE’s mandatory Involuntary Loss of Employment (ILOE) insurance scheme provides temporary financial support to insured employees who lose their jobs due to employer termination. If you have been paying ILOE contributions and your employment is terminated by the employer (not by resignation), you may be eligible for monthly payments of up to 60% of your basic salary (capped at AED 10,000 for the basic tier or AED 20,000 for the enhanced tier) for up to three months.

To claim, you must have been subscribed and paid contributions for the required minimum period (typically 12 consecutive months), the termination must have been initiated by the employer, you must not have been dismissed for gross misconduct under Article 44, and you must file the claim within 30 days of your last working day. The ILOE scheme does not distinguish between crisis-related terminations and normal redundancies — if you meet the criteria, you can claim.

How to File a Complaint with MOHRE

If your employer has reduced your salary without consent, placed you on unpaid leave unilaterally, withheld end-of-service dues, or terminated you without proper notice or payment, the MOHRE complaint process is your primary remedy.

Step-by-Step Process

1. Gather documentation: Employment contract (MOHRE-registered copy), salary slips or WPS records, termination letter (if issued), any written communications about salary changes or unpaid leave, and your passport and Emirates ID copies.
2. File online through the MOHRE Smart App or the MOHRE website. Select “Labour Complaint” and describe the specific violation — unpaid salary, wrongful termination, salary reduction without consent, etc.
3. MOHRE mediation: MOHRE will contact both parties and attempt to resolve the dispute amicably. For claims of AED 50,000 or less, MOHRE can issue a binding decision with the force of a court writ — no separate court proceedings required.
4. Court referral: If mediation fails and the claim exceeds AED 50,000, MOHRE refers the case to the Court of First Instance. You must file your court claim within 14 days of MOHRE’s referral approval.
5. Salary continuation: Under the 2024 amendments, MOHRE may order the employer to continue paying your salary for up to two months while the dispute is being resolved.

Time limit: Labour claims must be filed within two years of the employment relationship ending. Do not delay — the sooner you file, the stronger your position, particularly for salary and WPS-related complaints where digital records provide immediate evidence.

Free Zone, DIFC, and ADGM Employees: Different Rules

Most free zone employees (DMCC, JAFZA, DAFZA, etc.) fall under Federal Decree-Law No. 33 of 2021, with the same rights and protections as mainland employees. However, free zones may have additional administrative procedures or internal dispute resolution steps before escalating to MOHRE.

DIFC and ADGM employees are governed by their own employment laws, not the federal Labour Law. DIFC Employment Law No. 2 of 2019 and ADGM Employment Regulations 2019 follow common law principles. Termination, notice, gratuity-equivalent (DIFC End of Service Gratuity or ADGM equivalent), and dispute resolution follow separate frameworks and are handled by DIFC Courts or ADGM Courts respectively. If you are employed in the DIFC or ADGM, your rights during a crisis are determined by your DIFC/ADGM employment contract and the applicable free zone law — not the federal framework described in this article.

COVID-19 Comparison: What Was Different Then

During the COVID-19 pandemic in 2020, MOHRE issued specific ministerial resolutions that provided a legal framework for crisis-era employment adjustments. Resolution No. 279 protected UAE national employees specifically. Resolution No. 280 set out graduated steps for private sector employers: first use remote work, then grant paid leave from annual leave balance, then reduce working hours with proportional pay (with employee consent), then offer unpaid leave (with employee consent), and finally proceed to salary reductions (with employee consent). Only after exhausting these steps could employers consider redundancy dismissals.

These resolutions created a sanctioned procedural pathway. Employers who followed the steps were protected from arbitrary dismissal claims. Crucially, no equivalent ministerial resolution has been issued for the 2026 conflict. This means employers attempting the same graduated approach (unpaid leave, salary reductions) without employee consent lack the legal cover that the COVID-era resolutions provided. Every salary change and leave arrangement must be individually negotiated and documented with written consent.

Frequently Asked Questions

Can my employer reduce my salary citing the conflict?

Not without your written consent. Under UAE Labour Law, any change to your contractual salary requires a signed agreement between employer and employee, with the amended contract updated on the MOHRE portal. A unilateral salary cut — even if framed as “temporary” or “due to exceptional circumstances” — is a contract violation. You can file a complaint with MOHRE and refuse the reduction.

Can my employer place me on unpaid leave without my agreement?

No. There is no statutory provision permitting employers to impose unpaid leave unilaterally. During COVID-19, specific ministerial resolutions permitted this (with conditions), but no equivalent resolution exists for the current situation. Unpaid leave requires your written consent. If imposed without consent, it constitutes non-payment of wages, and you can file a MOHRE complaint.

What is the difference between the current situation and COVID-19 for employment rights?

During COVID-19, MOHRE issued Ministerial Resolutions No. 279 and 280 that created a specific legal framework for salary reductions, unpaid leave, and reduced hours. These resolutions provided employers with legal protection if they followed the graduated steps with employee consent. No equivalent ministerial decision has been issued for the 2026 conflict. This means all existing labour law protections apply in full without any crisis-specific modifications.

Does force majeure allow my employer to terminate me without notice or gratuity?

No. Force majeure is not listed as a ground for termination without notice under Article 44 of the Labour Law. Even if a business genuinely closes permanently due to the crisis (which is a valid termination ground under Art. 42), the employer must still pay all statutory entitlements — notice period compensation, end-of-service gratuity, accrued leave, and any outstanding salary. As explained in our guide to force majeure in UAE contracts, force majeure may excuse non-performance of some contractual obligations, but payment of money is almost never classified as “impossible.”

What grace period do I get after losing my job?

The grace period depends on your visa category. Skilled workers (MOHRE levels 1–3) receive 180 days. Other employment visa categories receive 60 days. Green Visa holders receive 180 days. Golden Visa holders‘ visas are not tied to a specific employer and remain valid regardless of employment status.

Can I claim unemployment insurance (ILOE)?

Yes, if you meet the eligibility criteria: you must have been subscribed and paid contributions for at least 12 consecutive months, the termination was initiated by the employer (not your resignation), and you were not dismissed for gross misconduct. You must file the claim within 30 days of your last working day. Payouts are up to 60% of basic salary, capped at AED 10,000 or AED 20,000 depending on your tier, for up to three months.

What if my employer refuses to cancel my visa after termination?

If your employer refuses to process visa cancellation, you can file a complaint with MOHRE. Under the law, employers must cancel the work permit and residence visa within seven days of the employee’s last working day. Failure to cancel exposes the employer to penalties and restricts their ability to sponsor new employees. You can also contact GDRFA (Dubai) or ICP (other emirates) directly to request cancellation from their side if the employer is unresponsive.

Can I negotiate a better severance package than the statutory minimum?

Yes. The statutory entitlements (gratuity, leave encashment, notice pay) are the legal minimum — you can negotiate above them. During a crisis when employers want to reduce headcount quickly, there is often room to negotiate additional compensation in exchange for a clean exit, waiver of non-compete clauses, or an agreed reference letter. Get any negotiated terms in writing before signing any settlement agreement.

What if my employer has already reduced my salary and I signed under pressure?

You can file a grievance with MOHRE even if you previously signed a consent letter, particularly if the signature was obtained under duress, without adequate explanation, or without the required contract amendment being filed on the MOHRE portal. MOHRE and UAE courts have the authority to assess whether consent was genuinely given. Document the circumstances and file promptly.

Does my health insurance continue after termination?

Your employer-provided health insurance typically remains active until your visa is cancelled. After cancellation, the coverage lapses. During your grace period, you are responsible for arranging your own health insurance if needed. Some insurers offer short-term continuation policies for individuals in transition. If you require medical treatment during the grace period without insurance, you will pay out of pocket at private facilities or access government health centres at subsidised rates.

Official Sources

• UAE Government Portal — Terminating Employment Contracts and Arbitrary Dismissal
• UAE Legislation Portal — Federal Decree-Law No. 33 of 2021 (Labour Law)
• Al Tamimi & Company — Impact of COVID-19 Ministerial Resolutions (comparison reference)
• EGSH — UAE Labour Law: Employee Rights and Dispute Options (2026)
• Kayrouz & Associates — UAE Labour Law 2026: Employer Compliance Guide

Information current as of March 2026. UAE Labour Law provisions, MOHRE procedures, and grace periods are subject to change through ministerial resolutions and policy updates. No ministerial resolution modifying standard labour law provisions for the current conflict has been issued at the time of writing. This guide is informational and does not constitute legal advice. For specific employment disputes, consult a qualified UAE employment lawyer or file directly with MOHRE.