In the United Arab Emirates (UAE), an unlimited contract is a type of employment contract that allows for termination by either the employer or employee without a specific reason. However, there are specific laws and regulations in place that govern the process of contract termination.

According to UAE Labor Law, both parties must provide a notice period before terminating the contract. The notice period varies depending on the length of service and the terms of the contract. For contracts that have been in effect for less than five years, the notice period should be at least 30 days. For contracts that have been in effect for more than five years, the notice period should be at least 90 days.

It`s important to note that if an employee terminates a contract without providing the required notice period, the employer can demand compensation for damages caused by the sudden departure. The amount of compensation can be up to the sum of the employee`s salary for the notice period.

Similarly, if an employer terminates an unlimited contract without providing the required notice period, they may be liable to pay compensation to the employee. The amount of compensation is calculated as the employee`s basic salary for the notice period, or the remaining period if the notice period has already started.

It`s also worth noting that employers are required to provide a valid reason for termination if the employee has been with the company for more than one year. The employer must explain the reason for termination in writing and must be able to prove that the reason is valid. If an employer cannot provide a valid reason, the employee may be entitled to compensation for unfair dismissal.

In conclusion, UAE Labor Law provides specific regulations and requirements for the termination of unlimited contracts. Both employers and employees must adhere to these regulations to ensure a fair and just process. Employers must provide a valid reason for termination if the employee has been with the company for more than one year, and both parties must provide the required notice period before terminating the contract. By following these regulations, all parties involved can ensure a smooth and lawful termination process.