Leaving a job is not always the employee’s choice. People sometimes go because they find better jobs, want more money or need to move to another city. Sometimes companies tell employees to leave because business is slow, or their work isn’t good enough, or their position is no longer needed.
These two situations are called voluntary and involuntary termination.
Employers in the UAE need to take the difference into account when preparing resignation letters, issuing termination notices, calculating the final salary and whether or not an employee has to serve notice.
What Is the Difference Between Voluntary and Involuntary Termination for Employees and Employers?
The easiest way to understand the difference is to look at who decided to end the job.
Voluntary termination is when the employee decides to leave. When the company makes that decision, it is involuntary termination.
Imagine an accountant in Dubai getting a better-paying job somewhere else. She hands in her notice and works out her notice period. This is voluntary termination.
Now imagine the same company loses a major client and decides to reduce its staff. The accountant loses her job even though she has done nothing wrong. This is involuntary termination.
The final result is the same in both cases, but the reason for leaving is different.
What Is Voluntary Termination of Employment?
Voluntary termination is when an individual chooses not to work for their current employer anymore.
Most people associate voluntary termination with resignation, but retirement can also fall into this category.
Why Do Employees Resign?
Employees leave for different reasons, including:
- Better salary: Another company offers more money for similar work.
- Career growth: An employee finds a position with greater responsibilities.
- Family responsibilities: Someone needs to relocate or look after a family member.
- Work pressure: Long working hours or an unreasonable workload make the job difficult.
- Management problems: Employees feel their concerns are being ignored.
Sometimes, the employee didn’t hate the company when they left. Sometimes, another opportunity simply suits their plans better.
Employers can use exit interviews and employee surveys to find out why people leave. When several workers mention the same problem, management should investigate it.
What Is Involuntary Termination of Employment?
Involuntary termination means an employer decides that an employee will no longer work for the company.
That doesn’t necessarily mean the employee did something wrong. A person may lose their job simply because the company cannot afford to keep everyone.
Why Do Companies Terminate Employees?
Some common reasons include:
- Poor performance: The employee consistently struggles to complete assigned work.
- Misconduct: The employee commits a serious workplace violation.
- Redundancy: The company no longer needs a particular position.
- Financial problems: The business needs to reduce salary expenses.
- Business closure: The company closes an office, department, or entire operation.
A retail business in Dubai, say, might close two branches after a sales slump. Employees working at those locations could lose their jobs despite having good performance records.
Employers should keep proper records and check the legal requirements before dismissing an employee.
Voluntary vs Involuntary Termination: What Changes?
| Voluntary termination | Involuntary termination |
|---|---|
| Employee chooses to leave | Employer decides to end the job |
| Commonly involves resignation | Commonly involves dismissal or redundancy |
| Employee usually gives notice | Employer usually gives notice |
| May happen for personal reasons | May happen for business reasons |
| Employee submits a resignation | Employer issues a termination notice |
In either case, the employer must calculate the employee’s final payments according to the employment contract and applicable law.
What Does UAE Labour Law Say About Termination?
UAE Federal Decree-Law No. 33 of 2021 permits employers and employees to terminate employment contracts if the legal conditions are met.
For most private-sector employment contracts, the agreed notice period must be between 30 and 90 days. Different notice rules apply during probation.
Employees who qualify for end-of-service gratuity can receive it whether they resign or their employer terminates their employment. Foreign private-sector employees are generally eligible after 1 year of continuous service.
Employers must also pay outstanding wages and other legally due amounts within the required time.
An employee can be dismissed before the expiry of his notice period only in certain cases envisaged by law. A company cannot ignore these rules just because it wants someone to leave quickly.
What Should Employers Do When Someone Leaves?
An employee’s departure should not turn into an argument over salary, paperwork, or unfinished work.
There are a few things employers should check:
- Confirm the employee’s final working day.
- Check the employment contract and notice requirements.
- Keep the resignation or termination letter.
- Calculate unpaid salary, leave payments, and gratuity where applicable.
- Arrange the return of company laptops, keys, and documents.
- Give someone responsibility for unfinished tasks.
For small companies, there’s probably no full-time HR manager for these issues. HR outsourcing services can help them organise records and complete routine employee paperwork.
Why Should Companies Pay Attention to Employee Resignations?
Imagine five employees resigning from the same department within three months. Replacing them might solve the staffing shortage, but it will not explain why they left.
Maybe their boss gives them too much work. Maybe the salaries are lower than what companies in the area are paying. Employees might also feel they have little chance of promotion.
HR consulting and HR services for small businesses can help employers examine these concerns.
HR recruitment and talent search services help you to find the right candidates if you need to replace staff.
HR Support for Businesses in Dubai
Resignations, dismissals, and staff shortages are common issues for growing companies. Keeping employment records accurate and following UAE labour rules can take considerable time.
The Greater Change is an HR consulting, recruitment and outsourcing services provider in Dubai and helps employers with their daily staffing and HR needs.
Frequently Asked Questions
1. Is resignation voluntary termination?
Yes. Resignation is voluntary termination when an employee decides to leave their job.
2. Is being fired involuntary termination?
Yes. Being fired is involuntary termination because the employer makes the decision.
3. Can employees receive gratuity after resigning in Dubai?
Yes. Employees who meet the legal eligibility requirements can receive end-of-service gratuity.
4. Is a notice period compulsory in the UAE?
Generally, yes. Notice requirements depend on the employment contract and applicable UAE labour rules.
5. Can a company terminate an employee without giving a reason?
Employers must follow UAE labour law. Dismissals without notice are permitted only under specific legal conditions.
