LABOUR CANCELLATION

Labour cancellation is a crucial process for employers and employees in the UAE, particularly when terminating employment contracts and ensuring compliance with local labor laws. 

What is Labour Cancellation?

Labour cancellation refers to the formal termination of an employment contract and the associated work permit or labor card issued by the Ministry of Human Resources and Emiratisation (MOHRE) in the UAE. This process is mandatory when an employment relationship ends, whether due to resignation, termination, or the expiration of the employment contract.

Key Components of Labour Cancellation

1. Employer Responsibilities: Employers are responsible for initiating the labour cancellation process, ensuring that all legal requirements and procedures are followed.

2. Employee Rights: Employees have the right to receive their final dues, including salary, end-of-service benefits, and any other entitlements, before the labour cancellation is completed.

3. Official Documentation: The process involves the cancellation of the work permit, labor card, and, if applicable, the residence visa associated with the employment.

Steps in the Labour Cancellation Process

1. Initiation by Employer: The employer initiates the cancellation process by notifying the MOHRE of the termination of the employment contract.

2. Submission of Documents: The employer submits the required documents to the MOHRE, which may include the employee's passport copy, labor card, employment contract, and a cancellation form.

3. Final Settlement: The employer calculates and settles the employee's final dues, including unpaid salary, gratuity, and any other contractual obligations.

4. MOHRE Approval: The MOHRE reviews the submitted documents and the final settlement details. Upon approval, the MOHRE issues a labour cancellation approval.

5. Cancellation of Residence Visa: If the employee has a residence visa linked to their employment, the employer must also coordinate with the General Directorate of Residency and Foreigners Affairs (GDRFA) to cancel the visa.

6. Return of Documents: The employer returns the employee's original passport and any other personal documents once the cancellation is complete.

Important Considerations in Labour Cancellation Process

1. Notice Period: Employers and employees must adhere to the notice period stipulated in the employment contract or as per UAE labor law, unless mutually agreed otherwise.

2. Employee Consent: The employee's consent may be required for the final settlement, particularly if there are disputes regarding the dues or other entitlements.

3. Labour Ban: In certain cases, a labour ban may be imposed on the employee, preventing them from working in the UAE for a specific period. This is typically applicable if the contract is terminated before its completion without a valid reason.

Implications of Labour Cancellation

1. Employer Compliance: Employers must comply with the legal requirements and procedures for labour cancellation to avoid penalties and ensure smooth processing.

2. Employee Transition: Labour cancellation allows employees to transition to new employment opportunities or exit the country, ensuring they receive their rightful entitlements.

3. Legal Protection: Proper execution of the labour cancellation process provides legal protection to both parties, reducing the risk of disputes or claims arising from the termination of the employment relationship.

Labour cancellation is a critical process in the UAE, ensuring that the termination of employment contracts is handled legally and fairly. By understanding the procedures and requirements involved, both employers and employees can navigate the process smoothly, safeguarding their rights and obligations.