Arbitrary Termination Under UAE Labor

Arbitrary-Termination-Under-UAE-Labor-Law

The United Arab Emirates is a hub of trade and commerce across the Middle East. The country boasts strong rule of law and a high standard of living. The UAE’s commercial importance, combined with the quality of life it offers, makes it a highly sought after place to live and work. Consequently, there is chronic oversupply in the UAE’s labor market. This puts employers in a stronger position, both in terms of negotiations with potential employees and in relationships with current staff. To counteract this imbalance, the UAE’s Labor Law  (“Labor Law”) is tilted in favour of employees. It provides them various rights and protections. Significant among them is the right against arbitrary termination. Under the Law, termination is considered arbitrary when an employee is fired or forced to resign without a “valid reason”.

Valid-Reasons-for-Termination

Only the following grounds constitute a “valid reason” to fire an employee:

Article 88 of the Labor Law

​During the annual leave or sick leave provided for hereunder, the employee may not work for another Employer; however, if the employer has established that the employee has done this, he shall have the right to terminate the service of the employee without notice, and to deprive him of the leave pay due to him.

Article 120 of the Labor Law

  • If the employee adopts a false identity or nationality or if he submits forged documents or certificates.
  • If the employee is appointed under a probationary period and dismissal occurred during or at the end of said period.
  • If he commits an error causing substantial material loss to the employer provided that the latter advises the labor department of the incident within 48 hours from having knowledge of the same.
  • If the employee violates instructions concerning safety of the place of business provided that such instructions are displayed in writing at conspicuous places and in case of an illiterate employee the latter be informed verbally of the same.
  • If he fails to perform his basic duties under the contract of employment and persists in violating them despite formal investigation with him in this respect and warning him of dismissal if the same is repeated.
  • If he divulges any secrets of the establishment where he is employed.
  • If he is awarded final judgement by the competent court in respect of an offence prejudicing honour, honesty or public morals.
  • If during working hours he is found drunk or under the influence of drugs.
  • If in the course of his work he commits an assault on the employer, the manager or any of his colleagues.
  • If he absents himself without lawful excuse for more than twenty intermittent days or for more than seven successive days during one year.

    • Poor Performance

    The employee is a poor performer or has committed some other misconduct.

    ​​In short, in the UAE, an employee cannot be fired at the whim of their employer. There must be a “valid reason” for termination. In the absence of such a “valid reason”, termination is deemed arbitrary.

    What-to-Do-If-Arbitrarily-Terminated

    What-to-Do-If-Arbitrarily-Terminated_2

    Therefore, if an employee believes themselves to have been terminated arbitrarily, they may file a labor complaint against such termination with the Ministry of Human Resources and Emiratisation. The Ministry will first attempt to resolve the complaint amicably. If the employer and erstwhile employee cannot come to an agreement before the Ministry, the employee may then proceed with a case in the labor court.

    If the labor court rules an employee’s termination to have been arbitrary, the court will proceed to order the employer to pay compensation in the form of a severance pay. Severance pay can be anywhere from one month to a maximum of three months of an employee’s last salary , depending on the damages the employee has suffered. As part of a labor case, an employee can also claim gratuity, salary for the notice period and any other unpaid dues from their employer.

    If you require assistance in an arbitrary termination dispute, please do not hesitate to get in touch with us to understand the best way forward to resolve your issue.

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