The Strategic Guide to Termination Letter in the UAE
Drafting for the reader who sees the letter in court, not the one who opens it.
What a termination letter in the UAE has to state if it is going to hold up months later: the instrument it is issued under, the ground relied on, the notice position and the sums owed in both directions. Covers mainland employment and civil contracts, DIFC and ADGM, and tenancy notices.
Reviewed by Mohamed Noureldin, Founder, Managing Partner & Senior Legal Consultant
A termination letter is read twice. The first reading is by the person or company on the receiving end, on the day it arrives. The second happens months later, by a judge or a tribunal, with the contract and the personnel file open alongside it. The second reading decides the case, and it is the reading most letters are not written for.
Letters that cause trouble are rarely written in bad faith. They are short, polite, and silent on the three points that later matter: which ground is being relied on, when the relationship actually ends, and what each side still owes the other.
Identify the instrument before drafting a word
On the mainland, an employment relationship ends under Federal Decree-Law No. 33 of 2021, the UAE Labour Law, which replaced the 1980 legislation. A commercial or civil contract ends under its own terms and, behind those terms, Federal Law No. 5 of 1985, the Civil Transactions Law. These are two different exercises. The permitted grounds, the notice, and the consequences of getting either wrong are not the same, so the first question is which of the two you are in.
Related: We act for employers and employees in wrongful termination claims across the UAE.
In the DIFC and the ADGM the source is different again. Both are common-law jurisdictions with their own courts, their own employment legislation and their own contract rules. Employment in the DIFC is governed by DIFC Law No. 2 of 2019; the ADGM applies its own Employment Regulations. A letter drafted against the federal Labour Law and sent to an employee registered in the DIFC cites the wrong instrument, and the mistake is visible on the face of the document.
What the letter has to say
Five things, in plain terms, and each of them for a reason.
- The parties and the contract. Full legal names as they appear on the trade licence and the contract, the agreement being terminated, and its date. Group companies share trading names; the letter should name the entity that is actually party to the contract.
- The ground. State the clause or the statutory basis relied on, and state the facts behind it. A letter that says only that services are no longer required hands the other side a blank page to fill in later, and reasons kept out of the letter are harder to advance once proceedings begin.
- The date and the notice. Say when the relationship ends, and say whether notice is being worked, paid in lieu, or dispensed with. If it is dispensed with, say on what basis. Silence here is read against the party who wrote the letter.
- What is owed in both directions. Final pay, accrued leave, end-of-service entitlement, outstanding invoices, and on the other side the return of company property, cards, devices and records. Check the figures before signing: a letter that misstates the settlement is an admission.
- Continuing obligations and forum. Confidentiality, restrictive covenants and any arbitration or jurisdiction clause that survives termination. Restate them; do not invent them. A letter cannot impose a duty the contract never contained.
Related: Our contract drafting practice builds termination mechanics into the agreement, where they belong.
Why the free zones read the document more closely
DIFC and ADGM tribunals treat the letter as the contemporaneous record of what the employer knew and why it acted. Where the contract or a policy sets out a process before dismissal — a warning, a meeting, a period to respond — the letter should show that the process happened. Asserting fairness is not the same as evidencing it, and the file assembled after a claim is filed always looks like a file assembled after a claim is filed.
Post-termination restrictions receive the same scrutiny. Confidentiality undertakings and non-compete clauses are frequently enforced in both zones, but they are enforced as written in the contract. Repeating them accurately in the letter puts the other party on notice; rewriting them there achieves nothing except an argument about which version governs.
Tenancy terminations are not employment letters
Not every termination letter concerns an employee. Ending a lease follows the tenancy rules of the emirate in question, with their own notice requirements and their own forum for disputes. Borrowing the structure of an employment letter for a tenancy notice, or the reverse, produces a document that is served on the wrong basis and can send the parties back to the beginning.
Related: See our tenancy termination work for landlords and tenants.
Before it goes out
Most of the risk in a termination is created in the week before the letter is signed, not after it is sent. Give one person authority to sign termination letters and require legal review before signature. Check the letter against the personnel or contract file so that the reasons given match the documents already on it. Keep a dated copy and proof of how the letter was delivered, because service is contested more often than content. And where the contract, the emirate and the free zone rules point in different directions, resolve that before the letter is sent rather than in the reply. Where the decision is finely balanced, the cost of an hour spent on the wording is trivially small against the cost of defending a claim that the wording invited.
Related Services: We draft and review termination letters for UAE employers, and advise on the employment termination process from first warning to final settlement.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.
Nour Attorneys Team
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