An employer-side guide for HR, payroll, and founders.
A question that surfaced in two UAE newspapers this month — readers who were terminated while on approved leave — is one every HR team should be able to answer from the employer's side before it becomes a dispute. The scenario is common: a decision is made to end a contract, and the employee happens to be away on annual leave when it lands. Can you serve notice now? When does the notice period actually start? And what does that do to the final pay run?
The short version is that you generally can serve notice during annual leave, but the notice clock does not start when you think it does. Under Article 35 of Federal Decree-Law No. 33 of 2021, if an employee is on leave when notice is served, the notice period does not begin until the day after their scheduled return — unless both parties agree otherwise in writing. Get that start date wrong and every downstream figure, from the last day of employment to the settlement deadline, is wrong with it.
This guide sets out the rule, walks a worked example with real dates, handles sick and maternity leave separately because they are not the same, and gives you a checklist to run the process cleanly.
Informational only — not legal advice. This article is point-in-time (last updated October 2026) and summarises the general framework, not a legal opinion. The DIFC and ADGM operate separate frameworks. Verify with MOHRE (mohre.gov.ae) or a qualified adviser before acting.
The rule: Article 35 and when notice starts
Article 35 addresses exactly this situation — the validity of a notice period where the contract is terminated while the worker is on leave. The principle it sets out is that the notice period does not begin until the day following the day scheduled for the worker's return from leave, unless both parties agree otherwise.
Read that carefully, because it contains two separate points:
- Termination during leave is not prohibited. You are not barred from ending the contract while the employee is away (subject to the leave-type exceptions below). Notice can be served.
- But the clock is deferred. The notice period you are counting does not run during the leave. It starts the day after the scheduled return date.
The "unless both parties agree otherwise" clause matters in practice. Employee and employer can agree, in writing, that the notice runs concurrently with the leave — which can suit both sides when the separation is amicable. Without that written agreement, the statutory default applies and the notice starts after the return.
The reason and the notice itself: Article 43
Serving notice is not only a timing question. Under Article 43, either party may terminate for a legitimate reason, provided the other party is given written notice, and the employee works through the contractual notice period. That notice period must be at least 30 days and no more than 90 days, as set in the contract.
So a lawful notice during leave has three parts: a legitimate reason, written notice delivered to the employee, and a notice period that respects the 30–90 day contractual window — with the Article 35 rule deciding the day that window starts.
A worked example, with dates
The figures and dates below are illustrative, to show the mechanics.
Scenario. An employee is on 20 days of approved annual leave, scheduled to return on a set date. On day 5 of that leave, the employer serves valid written notice of termination, with a 30-day contractual notice period. There is no separate written agreement to run notice concurrently with the leave.
Working it through:
- The leave runs its course. The employee remains on annual leave for the full 20 days. Notice served on day 5 does not start the notice clock.
- Notice starts the day after the scheduled return. Under Article 35, the 30-day notice period begins the day after the employee was scheduled to return from the 20-day leave — not on day 5, and not on the return day itself.
- The last day of employment is therefore the scheduled return date plus 30 days of notice. In round terms, the contract ends roughly 20 days of leave + 30 days of notice after it all began — far later than "30 days from the day we told them."
- Leave salary covers the 20 days of annual leave as normal. Notice-period salary covers the 30 days of notice that follow the return. The employee is entitled to pay across both.
- The settlement date is driven by the contract end date: final dues should be settled within 14 days of the end of the contract, not within 14 days of the day notice was served.
The practical lesson: the day you serve notice and the day the notice period starts are two different dates, and payroll must key off the second one.
Sick leave and maternity leave are different
The Article 35 timing rule above is about the annual-leave case the recent news coverage addressed. Other leave types carry stronger protections, and they must not be conflated with annual leave.
- Sick leave. An employer generally cannot terminate or serve notice during an employee's sick leave. Ending a contract because of, or during, a documented sick-leave period is not treated the same as the annual-leave case — the protection is greater.
- Maternity leave. An employer cannot terminate an employee because of pregnancy or during maternity leave, consistent with the protections in the law (reflected in Article 30 and its sub-clauses).
Because these protections are stronger and the exact boundaries are fact-specific, treat sick and maternity leave as do-not-proceed-without-advice situations. Where this guide and your own live policy describe these protections, keep the wording consistent and confirm the article references before you rely on them.
The HR checklist
When you need to end a contract and the employee is on annual leave, run this sequence:
- Confirm the leave type and dates. Establish exactly what leave the employee is on and the scheduled return date. If it is sick or maternity leave, stop and take advice before going further.
- Confirm a legitimate reason for termination and that you can evidence it.
- Issue written notice to the employee, delivered in a way you can prove (not a verbal conversation).
- Record the notice start date correctly — the day after the scheduled return, unless you have a signed agreement to run it concurrently with the leave.
- Set the contract end date = notice start date + the contractual notice period (30–90 days).
- Adjust the payroll end date to that contract end date, and make sure leave salary and notice-period salary are both accounted for.
- Settle all dues within 14 days of the contract end date — gratuity, any leave encashment, and outstanding wages.
The bottom line
Terminating during annual leave is lawful, but Article 35 moves the goalposts on timing: the notice period starts the day after the scheduled return, not the day you serve notice, and the whole settlement timeline shifts with it. Get the start date right, pay across both the leave and the notice, and settle within 14 days of the contract end. And treat sick and maternity leave as a different question entirely — one to take advice on, not to process on autopilot.
For the surrounding rules, see RadixHR's termination of employment guide, the notice period guide, the types of leave guide, and the gratuity calculator guide for the final-settlement figures.
Sources & references
This guide is based on the following official UAE government sources, current at the time of writing (verify the latest versions directly, as the law and MOHRE guidance are updated periodically):
- Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relationships (as amended) and its Executive Regulations — Article 30 (maternity leave), Article 35 (notice served during leave) and Article 43 (termination with notice). Published on the UAE Legislation portal.
- MOHRE (mohre.gov.ae) — guidance on termination, notice periods and final settlement for the mainland private sector.
- DIFC and ADGM — separate employment frameworks with their own termination and notice rules. Confirm the applicable regime with the relevant authority.
Get the notice start date right the first time
RadixHR works out the correct notice start date, last day of employment, and 14-day settlement deadline from the leave and contract records — so an offboarding during leave is calculated right the first time, with leave salary, notice-period salary and gratuity all accounted for in the final pay run.
This article is for general information only and does not constitute legal advice, and is point-in-time (last updated October 2026). Termination and notice rules are set under Federal Decree-Law No. 33 of 2021 and its Executive Regulations and are subject to change; the DIFC and ADGM operate separate frameworks. Verify current requirements with MOHRE or a qualified adviser before acting.
