Table of Contents
- What Is Arbitrary Dismissal in the UAE?
- Article 47 of UAE Labour Law: Legal Position
- What Compensation Can an Employee Claim?
- Not Every Termination Is Arbitrary Dismissal
- Examples of Situations That May Lead to an Arbitrary Dismissal Claim
- Termination Without Notice Under Article 44
- What Should an Employee Do After Arbitrary Dismissal?
- Filing a Labour Complaint with MOHRE
- Evidence Required for an Arbitrary Dismissal Claim
- Can an Employer Defend an Arbitrary Dismissal Claim?
- Employer Compliance Tips to Reduce Risk
- Final Settlement After Termination
- How HHS Lawyers Can Help
- FAQs
- Final Overview
Arbitrary dismissal in the UAE is an important employment law issue for both employees and employers. Under the current UAE Labour Law, Federal Decree-Law No. 33 of 2021, an employee may have a claim for arbitrary or unlawful dismissal if the employer terminates the employment because the employee filed a serious complaint with the Ministry of Human Resources and Emiratisation or filed a valid lawsuit against the employer.
This means that not every termination automatically becomes arbitrary dismissal. The employee must usually show that the dismissal was connected to the complaint or legal action taken against the employer. If the claim is proven, the competent authority or court may order compensation in addition to other labour entitlements such as notice period dues, unpaid salary, leave salary, and end-of-service benefits.
In this article, our labour and employment lawyers in Dubai explain what amounts to arbitrary dismissal in the UAE, when an employer may terminate without notice, what compensation may be claimed, and how employees can take legal action through MOHRE or the labour court.
What Is Arbitrary Dismissal in the UAE?
Arbitrary dismissal refers to an unlawful termination of employment where the employer dismisses the employee for a reason prohibited under UAE labour law. Under Article 47 of the UAE Labour Law, termination may be considered unlawful if the employer dismisses the employee because the employee filed a serious complaint with MOHRE or filed a lawsuit against the employer, and the validity of that complaint or lawsuit is proven.
This legal protection is designed to prevent employers from retaliating against employees who exercise their legal rights. For example, if an employee files a legitimate complaint for unpaid salary, unpaid overtime, unsafe working conditions, or breach of contract, and the employer terminates the employee because of that complaint, the employee may have grounds to claim arbitrary dismissal compensation.
Find out more: Arbitrary Dismissal: Employee Contract Termination by Employer
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Article 47 of UAE Labour Law: Legal Position
Article 47 of Federal Decree-Law No. 33 of 2021 deals with unlawful termination of an employee’s service. The key principle is that the termination is unlawful if it occurs because the employee submitted a serious complaint to MOHRE or filed a lawsuit against the employer and the validity of the complaint or lawsuit is established.
If arbitrary dismissal is proven, the employer may be ordered to pay fair compensation to the employee. The compensation is assessed based on the nature of the work, the harm suffered by the employee, and the employee’s length of service. However, the compensation cannot exceed the equivalent of three months’ wage calculated on the basis of the employee’s last wage.
The employee’s right to arbitrary dismissal compensation does not remove other statutory entitlements. The employee may still claim unpaid salary, notice period pay, accrued leave salary, end-of-service gratuity, and any other unpaid employment dues depending on the facts of the case.
What Compensation Can an Employee Claim?
If arbitrary dismissal is proven, the employee may claim compensation of up to three months’ wage. The exact amount is not automatic. The competent court or authority will consider the evidence, the seriousness of the employer’s conduct, the damage suffered by the employee, the duration of employment, and the employee’s salary.
In addition to arbitrary dismissal compensation, the employee may also be entitled to claim:
- Unpaid salary;
- Payment in lieu of notice, where applicable;
- Accrued but unused annual leave salary;
- End-of-service gratuity;
- Unpaid commission, bonus, or contractual benefits, if proven;
- Repatriation costs, where applicable;
- Any other employment dues supported by the contract or UAE labour law.
Employees should keep all relevant documents and communications because arbitrary dismissal claims are evidence-based. A claim is stronger where the employee can show a clear connection between the complaint or lawsuit and the employer’s decision to terminate.
Not Every Termination Is Arbitrary Dismissal
A common misunderstanding is that every termination without a detailed reason is automatically arbitrary dismissal. Under the current UAE Labour Law, arbitrary dismissal under Article 47 is mainly linked to retaliatory termination after a serious MOHRE complaint or valid lawsuit by the employee.
However, a termination may still create other legal claims if the employer fails to comply with notice requirements, final settlement obligations, leave salary, gratuity payment, or contractual rights. Therefore, employees should not focus only on arbitrary dismissal compensation. They should review all unpaid entitlements and legal remedies available after termination.
Examples of Situations That May Lead to an Arbitrary Dismissal Claim
Each case depends on its facts, but the following situations may raise arbitrary dismissal concerns:
- An employee files a MOHRE complaint for unpaid salary and is terminated soon after;
- An employee files a labour case against the employer and the employer dismisses the employee because of that case;
- An employee reports a serious breach of employment rights and is dismissed as retaliation;
- An employee complains about unpaid end-of-service benefits or illegal salary deductions and is terminated;
- An employee raises a valid legal claim and the employer uses another reason as a cover for dismissal.
The timing of the termination, written communications, warning letters, HR emails, complaint records, and the employer’s stated reason for dismissal may all be relevant in proving the claim.
Termination Without Notice Under Article 44
Article 44 of the UAE Labour Law sets out cases where an employer may terminate an employee without notice. These cases are serious and should not be used casually. Employers should ensure that the facts are properly investigated, documented, and legally supported before relying on termination without notice.
An employer may terminate without notice in specific circumstances, including where the employee:
- Assumes a false identity or submits forged documents or certificates;
- Causes a serious material loss to the employer, provided the legal reporting requirements are met;
- Violates written workplace safety instructions after being made aware of them;
- Fails to perform fundamental contractual duties despite investigation and prior written warnings;
- Discloses confidential business information that causes loss or gives unlawful advantage;
- Is found intoxicated, under the influence of prohibited substances, or commits an act against public morals during working hours;
- Assaults the employer, manager, or colleagues during work;
- Is absent without a legitimate reason for more than 20 intermittent days or more than seven consecutive days in one year, subject to the required warning procedures;
- Uses the position unlawfully to obtain personal benefits or gains;
- Joins another establishment without following the applicable rules and procedures.
Employers should be careful when using Article 44. If the employer wrongly terminates the employee without notice, the employee may claim unpaid notice, final settlement dues, and other legal remedies.
What Should an Employee Do After Arbitrary Dismissal?
An employee who believes they have been arbitrarily dismissed should act quickly and collect evidence before filing a complaint. The employee should avoid relying only on verbal statements and should prepare a proper file showing the employment relationship, the complaint or lawsuit, and the link between the complaint and termination.
Important steps include:
- Requesting the termination letter or written reason for dismissal;
- Keeping a copy of the employment contract and any amendments;
- Saving MOHRE complaint records or court filing documents;
- Keeping emails, WhatsApp messages, HR notices, and warning letters;
- Collecting salary slips, bank statements, and unpaid dues records;
- Calculating notice period, leave salary, gratuity, and other final settlement amounts;
- Filing a labour complaint through the proper MOHRE channel;
- Seeking legal advice before signing any final settlement or waiver.
Filing a Labour Complaint with MOHRE
Employees who believe they were unlawfully terminated may file a complaint with the Ministry of Human Resources and Emiratisation. MOHRE will generally review the complaint and attempt to resolve the matter amicably between the employee and employer.
For certain labour disputes, MOHRE has authority to issue final executive decisions where the claim value does not exceed AED 50,000. If the disputed amount is more than AED 50,000 and the parties do not reach a settlement, the matter may be referred to the competent court.
This makes it important for employees and employers to calculate the claim value correctly. The claim may include arbitrary dismissal compensation, unpaid salary, notice period, leave salary, gratuity, and other entitlements.
Evidence Required for an Arbitrary Dismissal Claim
Arbitrary dismissal claims depend heavily on evidence. The employee must usually prove that the termination was connected to a serious MOHRE complaint or a valid lawsuit against the employer.
Useful evidence may include:
- Employment contract;
- Termination letter;
- MOHRE complaint reference or labour case details;
- Emails or messages showing retaliation;
- Warning letters or disciplinary records;
- Salary slips and bank statements;
- Leave records and final settlement statement;
- Witness information, where relevant;
- Any written admission or communication from the employer.
Employees should ensure that evidence is collected lawfully. Unauthorised recordings, confidential company documents, or private communications may create separate legal risks if used improperly.
Can an Employer Defend an Arbitrary Dismissal Claim?
Yes. An employer may defend the claim by showing that the termination was based on a lawful reason and was not connected to the employee’s complaint or lawsuit. The employer may rely on performance records, disciplinary documents, restructuring evidence, redundancy records, business reasons, or Article 44 grounds where applicable.
However, employers should ensure that their internal records are consistent. If the timing of termination appears suspicious or the employer cannot explain the reason properly, the employee may argue that the dismissal was retaliatory.
Employer Compliance Tips to Reduce Risk
Employers can reduce the risk of arbitrary dismissal claims by following proper termination procedures and keeping clear documentation. HR teams should avoid emotional, rushed, or undocumented decisions, especially after an employee has filed a complaint or raised a legal issue.
Employers should:
- Document performance and disciplinary issues properly;
- Give written warnings where required;
- Follow the employment contract and UAE Labour Law;
- Avoid terminating employees in retaliation for complaints;
- Prepare a lawful termination letter;
- Calculate final settlement accurately;
- Keep salary, leave, and gratuity records updated;
- Take legal advice before terminating an employee who has filed a complaint.
Final Settlement After Termination
Regardless of whether the termination is disputed, the employer must settle the employee’s legal entitlements. A final settlement may include unpaid salary, unused leave, notice period, end-of-service gratuity, commission, reimbursements, or other contractual dues.
Employees should review the final settlement carefully before signing. If the employee signs a settlement, waiver, or release without understanding its effect, it may affect the ability to bring future claims. Legal advice is especially important where the employee believes the termination was arbitrary or where large unpaid amounts are involved.
Related service: Arbitrary dismissal lawyers in UAE can assist employees and employers in wrongful termination and labour dispute matters.
How HHS Lawyers Can Help
HHS Lawyers & Legal Consultants assists employees and employers in UAE labour law disputes, including arbitrary dismissal, wrongful termination, unpaid salary, end-of-service benefits, notice period claims, disciplinary action, labour complaints, and court proceedings.
Our legal team can review the employment contract, assess whether the dismissal may qualify as arbitrary, calculate labour entitlements, prepare legal notices, file complaints, represent clients before competent authorities, and assist with settlement negotiations or court proceedings.
If you need legal advice on arbitrary dismissal, wrongful termination, or employment disputes in the UAE, contact HHS Lawyers & Legal Consultants for professional support.
FAQs
What is arbitrary dismissal in the UAE?
Arbitrary dismissal may occur when an employer terminates an employee because the employee filed a serious complaint with MOHRE or filed a valid lawsuit against the employer.
What law governs arbitrary dismissal in UAE?
Arbitrary dismissal is addressed under Article 47 of Federal Decree-Law No. 33 of 2021 regulating labour relations in the UAE private sector.
How much compensation can an employee claim for arbitrary dismissal?
If arbitrary dismissal is proven, compensation may be awarded up to a maximum of three months’ wage, calculated based on the employee’s last wage.
Can I claim other dues besides arbitrary dismissal compensation?
Yes. The employee may also claim unpaid salary, notice period pay, leave salary, end-of-service gratuity, and any other unpaid contractual or legal entitlements.
Is every termination without a reason considered arbitrary dismissal?
No. Under the current UAE Labour Law, arbitrary dismissal is mainly linked to termination because the employee filed a serious MOHRE complaint or a valid lawsuit against the employer.
Can an employer terminate an employee without notice?
Yes, but only in specific cases listed under Article 44 of the UAE Labour Law, such as forged documents, serious misconduct, breach of safety rules, assault, or unauthorised absence.
How can an employee file an arbitrary dismissal complaint?
An employee may file a complaint with MOHRE. MOHRE may try to settle the matter amicably or issue a decision/referral depending on the claim value and the dispute.
What evidence is needed for an arbitrary dismissal claim?
Useful evidence may include the employment contract, termination letter, MOHRE complaint records, court documents, HR emails, warning letters, salary records, and messages showing retaliation.
Can MOHRE decide labour disputes directly?
For certain labour disputes where the claim value does not exceed AED 50,000, MOHRE may issue final executive decisions. Larger unresolved claims may be referred to the competent court.
How can HHS Lawyers help with arbitrary dismissal cases?
HHS Lawyers & Legal Consultants can review the termination, calculate labour dues, file complaints, prepare legal documents, negotiate settlements, and represent clients in labour disputes.
Need Labour Law Help?
Dubai's Expert Advice at Your Fingertips.
Final Overview
Arbitrary dismissal in the UAE is a serious employment law matter, but it must be assessed carefully under Article 47 of the UAE Labour Law. Employees should prove that the dismissal was linked to a serious MOHRE complaint or valid lawsuit, while employers should ensure that termination decisions are lawful, documented, and not retaliatory.
If you are facing termination, unpaid dues, a MOHRE complaint, or an arbitrary dismissal dispute, contact HHS Lawyers & Legal Consultants for legal advice and representation in UAE labour law matters.
