Termination of Employment and End of Service Benefit in Qatar – A Summary

  • Legal Development 23 February 2016 23 February 2016
  • Middle East

  • Employment, Pensions & Immigration

This article aims to provide a brief summary of the key provisions regulating the termination of employment and the payment of end of service benefit (EOSB) in the State of Qatar.

Termination of Employment and End of Service Benefit in Qatar – A Summary

Law No.(14) of 2004 (Qatar Labour Law) governs the terms of except those employees which are expressly excluded by virtue of Article 3 including; workers from ministries and governmental organisations, companies established by Qatar Petroleum, casual and domestic workers, etc. Where individuals are excluded from the Labour Law, their employment is subject to alternative legal and regulatory provisions. 

Termination of employment

In accordance with the Qatar Labour Law, where an employee's employment is for an indefinite term, employment can be terminated in one of two ways, with notice and the payment of EOSB or without notice and the payment of EOSB.

Indefinite contract

Article 49 provides that the employment of an employee, if he is employed for an indefinite or unlimited term and subject to the successful completion of the probationary period, may be terminated by either the employer or the employee providing written notice. There is no requirement for the party serving notice to provide a reason for the termination.

Notice must be at least one month if the period of service with the same employer is less than five years; and, two months for employees who have been employed for more than five years unless the employment contract provides for a longer notice period.

Upon termination, the employer will be required to pay the employee any and all contractual and statutory sums which are due to the employee, including; notice pay, EOSB, any accrued but untaken leave, any approved but unpaid expenses and any additional sums which may be due under the employment contract.

Termination without notice

Article 61 entitles an employer to terminate an employee's employment with immediate effect without notice or the payment of EOSB if the employee commits an act of gross misconduct. Examples include; assuming a false identity or nationality, submitting false documents, committing an act which causes gross financial loss to the employer, disclosure of confidential information, the employee is found drunk or under the influence of drugs during working hours etc..

Definite contract

If an employee is employed for a definite or fixed term, both the employer and the employee must mutually agree to terminate the employee's employment before the contract term has expired if there is no specific reason for such termination, e.g. gross misconduct. If an employer seeks to terminate employment and an employee does not agree to the same the employer may have to pay the employee his wages and other benefits in full for the remainder of the unexpired term.

It is important to note that Article 51 permits an employee to terminate his employment with immediate effect if, amongst other things, his employer has breached the terms of the employee's employment, has physically assaulted him, has misled him and/or if to continue employment would put the employee in danger and the employer is aware of such danger. In these circumstances, the employee will maintain his/her right to EOSB.


Who qualifies?

Article 54 provides that in addition to any sums to which the employee is entitled upon the expiry of service, the employer is obliged to pay EOSB to any employee who has completed one or more years' of continuous service. An employee is also entitled to be paid EOSB pro-rata for fractions of service, i.e. part years in employment.

How is it calculated?

EOSB can be agreed between the parties provided it is not less than three weeks of the employee's final basic salary for each completed year of service. EOSB is usually calculated using calendar days but may be calculated using working days if more appropriate given the particular working practices in a specific industry.

Any periods of valid leave such as sick leave, annual and maternity leave should be included in the calculation. However, any periods of unpaid leave will generally be excluded, but will usually be determined by company policy.

If the employee's period of service with the employer pre-dates the introduction of the Qatar Labour Law, i.e. 6 January 2005. EOSB for the period of employment to 6 January 2005 will be calculated in accordance with the terms of Law No. (3) of 1962, the previous Labour Law.

EOSB v pension arrangement

If the employer has in place a retirement scheme or any other similar system that guarantees for the employee, a benefit or net privilege at the end of service which is more generous than the compensation of the EOSB, the employer is not obliged to pay this compensation in addition to the EOSB.

If the overall net benefit accruing to the employee under the said system is less than EOSB, the employer is required to pay the employer EOSB and return to him/her any sums which the employee may have contributed to the said system. However, the key practical point is that the employee should be given the option of choosing between the said scheme and the EOSB.

Deductions from EOSB

An employer is entitled to deduct from an employee's EOSB any amounts that the employer is owed by the employee. The employer should consult with the employee before any deductions are to be made and where possible reach agreement with the employee regarding the proposed reductions in order to avoid disputes.

Disentitlement to EOSB

An employee loses the right to payment of EOSB if he/she is dismissed for reasons of gross misconduct.

Note: Qatari laws (save for those issued by the Qatar Financial Centre to regulate internal business) are issued in Arabic and there are no official translations, therefore for the purposes of drafting this article, we have used our own translations and interpreted the same in the content of Qatari regulations and current market practice.


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