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Compensation for Arbitrary Dismissal in UAE: Is It Possible

Arbitrary Dismissal Defined

This is also known as “unfair dismissal” wherein an employer decides to lay off an employee or coerce to do so without any reasonable grounds. This kind of dismissal is usually against the rules and regulations that are laid down by the government through a country’s labour law. For this, it means that the dismissal is unjustifiable and unreasonable and needs to be looked into.

Employees can file a complaint with regard to this when they know in themselves that laying them off is unfair. On the side of the employers, they must provide proof or evidence of their claim that the employee is dismissed with a good and substantial basis, like an employee is incapable to perform responsibilities, misconduct, not qualified, etc.

Arbitrary Dismissal in UAE

In the Article 122 of the UAE Labour Law, it states there that termination of an employee with the reason that is unrelated to work or because an employee has filed a complaint against an employer that results to termination means that it is an unfair dismissal.

To further understand this, it is essential to have an idea of the types of arbitrary dismissal that are listed below.

Arbitrary Dismissal Types

Company loss

There can be cases that an employee is a reason that a company suffers a great loss in revenue or something else entirely. This kind of incident is advised to be reported immediately within 48 hours along with evidence of the phenomenon to the Ministry of Labour or Ministry of Human Resources and Emiratisation.

In this case, the failure of the employer to do the above will make his action of terminating the employee for that reason an unfair dismissal.

Demotion with low pay

Employers that demote their employees and give them lower pay than what they started with can be seen as an unfair dismissal as well and can be grounds for an employee to file a complaint.

Forced resignation

A forced resignation is when an employer coerces an employee to pass a resignation letter. One of the ways of doing this is by threatening an employee to give in resigning. Threats are usually verbal intimidation in which an employer will threaten an employee that he will terminate him, damage his property, or make up an issue regarding his performance to simply compel him to resign.

Grounds for Employers to Terminate Without Notice

There is a list of reasons that a termination can indeed be done by an employer without any notice at all. According to Article 120 of the UAE Labour Law, the following is deemed lawful to be done by employers:

  1. An employee is found to be using a false identity or nationality. This includes submitting fraudulent documents of any kind.
  2. An employee is dismissed during the probation period.
  3. An employee has cost the company a big loss, and it’s reported to the concerned government departments within 48 hours with proof.
  4. An employee has failed in performing his responsibilities and duties as agreed between him and his employer through the employment contract. In addition to this, the failure to perform is not fixed even with a warning for dismissal lest the said issue is repeated.
  5. An employee is under the influence of alcohol or illegal drugs in the course of working in the office.

If the above-mentioned mentioned are used against an employee with proof to back it up, it is lawful and the employer has the right to dismiss his employee.

However, if an employee believes that it’s an unfair dismissal, a complaint can be filed. You are allowed to voice out your side to the Ministry of Labour, and if an amicable settlement is not reached, it shall be moved to the courts.

Compensation, unpaid dues, or other benefits that are not given to the employee can be claimed. The court will decide on the amount that will not exceed the employee’s three months’ worth of salary.

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M. Al Khairy, LL.B. is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Al Khairy also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators. Read more