Does UAE worker have to leave country after losing job?

Keren Bobker advises on the terms and conditions of a company breaking an employee's contract and what happens with regards to visas.

I have a friend who came from Indonesia to work in a hair salon. Her initial contract was for two years but the salon decided to close after she had been there for just three months. Can she stay in the UAE if she finds another job and transfer her visa? Or does she have to leave the country and start the whole thing from scratch? AA, Dubai

The first consideration is for your friend to ensure she receives appropriate compensation for the employer breaking the contract terms. Article 115 of UAE Labour Law states, “If the employer has terminated an employment contract with a limited period ... he becomes liable for payment of compensation to the employee against damages sustained by him, provided that the sum of compensation in all events, may not exceed the total pay due to him for a period of three months or for the remaining period of contract whichever is shorter, unless the terms of the contract provide otherwise.” This means that AA’s friend should receive a payment equivalent to three month’s salary as compensation. As she is not leaving the job of her own accord, there should not be a ban and she is free to take up new employment. A visa is specific to a particular employer and cannot be transferred so the visa related to this job must be cancelled by the employer and a new one arranged when she takes on a new role. The actual process can vary depending on how the employers arrange matters, and the individual’s nationality, but in some cases it is essential to leave the UAE and re-enter on a new visa.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at [e-mail]. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only