UAE Labour Law: Do I have to pay my employer if I resign?

Here are the details.

1. When you do not serve your notice period

According to Sunil Ambalavelil, a Dubai-based lawyer, one of the situations when an employee may be asked to pay his or her employer is when the worker fails to serve the required notice period.

The requirements for the notice period as mentioned in Article 43 of the UAE Labour Law – Federal Decree Law No. 33 of 2021 – can be found here.

“In the event that the employee fails to serve this notice period as per the contract, such employee shall be liable to pay the employer compensation under the name ‘payment in lieu of notice’, even if the failure of notice did not result in harm to the other party,” he said.

“The compensation shall be equal to the worker’s remuneration for the entire notice period or the remaining part thereof,” he added.

So, if you fail to provide the required notice before quitting, you may be asked by the employer to make the ‘payment in lieu of notice’, which is also referred to as the ‘notice period allowance’.

You may be asked to pay this after your employer settles all your dues or even through a court, if there is a disagreement which leads to a court case.

2. In some situations when resigning during the probation period

Mohamed Noureldin, founder and senior legal consultant at Nour Attorneys, highlighted another situation when you may be required to pay your employer when you quit. This situation occurs when an employee quits during the probation period and if the contract has provisions requiring him or her to bear the recruitment or contracting costs.

“If the employee resigns during the probation period, Article 9 of the Labour Law states that ‘the new employer shall compensate the original employer with the costs of recruiting or contracting with the Employee, unless agreed otherwise.’ Therefore, if it is agreed in the employment contract that the employee shall bear the expenses of recruiting or contracting if he or she resigns during the probation period, the employer can ask for such compensation from the employee,” Noureldin said.

Cases when you do not have to pay compensation to your employer

Firstly, as long as you have completed your probation period and are serving your notice period, you cannot be asked to pay compensation to your employer. Also, there may be some cases where you can resign with immediate notice, and you may not be liable to compensate your employer.

“If the resignation by the employee is because of any of the reasons mentioned in Article 45 the law [on leaving work without notice] – such as breach of obligations by the employer, assault or harassment or violence on the employee by the employer or its representatives during work, grave danger in workplace that threatens the safety or health of the employee, or giving an assignment that is fundamentally different from the work agreed in the employment contract – the employee may resign and terminate the contract with immediate effect and in such an event, the employee shall not be liable to pay any compensation for the notice period.”