Severance And Release Agreement Template for the United Arab Emirates

A Severance and Release Agreement is a legally binding contract that formally ends your employment relationship in the United Arab Emirates. This comprehensive document outlines the terms of separation, financial settlements, and mutual obligations between you and your employer, ensuring compliance with UAE Federal Decree-Law No. 33 of 2021.

When do you need this document?

You need a Severance and Release Agreement when your employment is ending through mutual agreement, redundancy, or negotiated termination. This document is essential during company restructuring, voluntary resignation with negotiated benefits, or when resolving potential employment disputes before they escalate. It's particularly important in the UAE's diverse workforce environment where clear documentation protects both parties' rights under local labor law. The agreement becomes crucial when significant compensation is involved, when you have access to confidential company information, or when your employer wants to ensure a clean separation without future legal claims.

Key legal considerations

Your severance agreement must clearly calculate end-of-service gratuity according to UAE law requirements, which varies based on your employment duration and salary structure. The document should address outstanding salary, unused annual leave, and any additional compensation beyond statutory minimums. Pay special attention to confidentiality clauses that protect company trade secrets and client information, as these remain enforceable post-employment. Non-competition restrictions must be reasonable in scope and duration under UAE contract law. The agreement should specify whether you're eligible for employment visa transfer assistance or if visa cancellation is required. Ensure all financial settlements are clearly itemized and payment schedules are realistic and enforceable.

Legal requirements in United Arab Emirates

Under UAE Federal Decree-Law No. 33 of 2021, your severance agreement must comply with mandatory end-of-service benefit calculations, which typically equal 21 days of final salary for each year of service. The document must be prepared in both English and Arabic if either party requests translation, with Arabic taking precedence in case of disputes. Your agreement should reference compliance with Ministerial Resolution No. 47 of 2022 regarding termination procedures and notice requirements. For UAE nationals, the agreement must consider pension law implications under Federal Law No. 7 of 1999. The document should address visa cancellation timelines, typically required within 30 days of employment termination, and specify responsibility for associated costs. Both parties should sign before authorized witnesses, and the agreement should include provisions for dispute resolution through UAE courts or approved arbitration centers.