UAE: Can Employees Request Severance Packages in Job Contracts?
In the UAE, employees are entitled to request severance packages in their job contracts, according to legal experts.
Under Federal Decree Law No. 33 of 2021, employees who have completed at least one year of continuous service are eligible for severance pay, which is calculated based on their basic salary.
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The law specifies that severance pay consists of 21 days’ salary for each of the first five years of service and 30 days for each additional year.
Legal experts emphasize that while standard employment contracts may not typically include severance clauses, employees can negotiate these terms with prospective employers.
If a severance clause is not included in the contract, employees are still entitled to receive severance pay based on the law, provided they meet the service duration requirement.
The UAE’s employment laws ensure that employees receive their entitled benefits, and employers are permitted to offer more favorable terms if they choose.
Workers interested in a “golden handshake” or similar arrangements are encouraged to discuss this with their employers to include such provisions in their contracts.
The clarification aims to inform employees of their rights and encourage them to seek fair terms in their employment agreements.
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