The cancellation of limited contracts in the United Arab Emirates (UAE) is a process that must be followed in accordance with the labor laws of the country. It is a crucial process that both employers and employees must understand to avoid any legal issues.

Limited contracts are contracts of employment that come with an agreed-upon term. The duration of the contract is typically two to three years, and it clearly specifies the terms of employment, including the employee’s duties, remuneration, and benefits. However, the contract does not guarantee job security beyond the agreed-upon term.

When an employer and employee agree to terminate a limited contract before its expiration, they must follow a specific legal process. The first step is to provide notice to the other party of the intention to terminate the contract. The notice period should be in line with the labor laws; for instance, an employer must provide an employee with at least one month’s notice in advance of the contract termination.

Once the notice period has been served, the employer must request the cancellation of the employee’s work permit, and the employee must cancel their residency visa. Both parties must complete the relevant procedures of canceling their visas and permits within the designated period. Failure to do so could result in penalties and fines.

It is important to note that the employer must settle all outstanding dues, including salary, benefits, and end-of-service gratuity, before canceling the employee’s work permit. The employee should also return any equipment, documents, or property belonging to the employer.

Failure to adhere to the legal process of canceling a limited contract could result in legal action against both parties. An employee may be subject to a labor ban, which prevents them from working in the UAE for a certain period, and an employer may face fines or legal action.

In conclusion, the cancellation of limited contracts in the UAE is a legal process that must be followed to avoid any legal issues. Employers and employees must understand the process and adhere to the legal requirements to ensure a smooth and successful contract termination. It is recommended to seek legal advice when canceling a limited contract to ensure compliance with the labor laws.