Arbitrary Termination Under UAE Labor
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”.
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
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.