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Wrongfully terminated employee can claim as compensation

Wrongful Termination in UAE: Compensation for Employees Under Arbitrary Dismissal

Unlike in other countries, especially in Europe in which employment relationship termination can become very complicated for employees that have provided long-term service, a UAE employer has the ability in terminating the employment of a staff member with relative ease given it has provided a notice that’s agreed by parties mutually.

Despite the general ability of employers to terminate employees, Federal Law of 1980 No. 8, which is the UAE Labour Law, acknowledges that they are certain circumstances wherein employees are unfairly dismissed. The UAE Labour Law provides rights of employees in the UAE to claim compensation if they are able to provide sufficient proof that the dismissal was indeed unfair.

Find out more info: Arbitrary Dismissal: Employee Contract Termination by Employer

Circumstances in which termination is regarded as unfair or Arbitrary

UAE Labour Law Article 122 states that the termination of an employee can be considered as unfair when the reason for the termination is not related to the employee’s performance. As the legislation doesn’t provide any further explanation regarding instances wherein employment relationship cancellation can be considered as arbitrary, courts will give employees the responsibility in presenting proof of unfair conduct of employers.

UAE courts have also held that for employment contracts that don’t have fixed terms, redundancy may be considered as a valid reason in the termination of employees and such won’t be treated as unfair or arbitrary dismissal. Take note: an employer has to show proof that redundancy is, in fact, genuine, for instance other employees are redundant as well and the job in question won’t be taken by a different employee.

Examples of where UAE courts have ruled dismissal was arbitrary and entitled employees to compensation are as follows:

  • Where an employer breached its obligations as per the employment contract, as well as those that are provided by the labour and employment legislation, including the obligation in paying the salary of an employee within the time frame that has been laid down by the employment contract, of which has resulted to the employee leaving employment;
  • An employer has put its employee in the position where it appears it has initiated the termination of the contract through the employer’s oppressive acts and breach of employment contract conditions, provided that there is sufficient proof that employer’s actions were the cause for such contract termination

Read More: Labor Ban Under Unlimited Contract in UAE

Compensation for Employees from Arbitrary Dismissal

In assessing amount of compensation that is payable to an employee for arbitrary dismissal, UAE courts will regard the kind of employment that is in question, as well as the duration of employment and extent of damage the employee has suffered. Notwithstanding this, UAE Labour Law Article 123 states that compensation for arbitrary dismissal can’t exceed amount equivalent to salary of the employee for three months.

In addition to the arbitrary dismissal compensation, employees may claim their notice period dues, gratuity, and other unpaid dues that they are entitled to form their employers.

Find more info: Role of the Arbitration Lawyers

Termination of Contract without Notice

An employment contract, regardless of whether it is limited or unlimited, may be terminated as permitted by the law and be done so without any notice period.

Contract Termination by Employer

An employer does not have to provide notice to the termination of an employment contract and deprive the employee service gratuity if the employee does any of the following:

  • Is appointed under probationary period for not more than six months and the dismissal has occurred at the end or during the said probationary period;
  • Adopts a nationality or false identity or if the employee submits forged educational certificates or documents;
  • Commits an error which caused material loss to employer provided the latter has advised the MOHRE of the incident 48 hours from acquiring knowledge of the error;
  • Divulges any secrets maintained by the establishment or organization where the employee has been employed;
  • Fails in performing basic duties that are laid out in the employment contract with the employee persisting in committing violations despite giving warning of dismissal and a formal investigation in the matter;
  • Violates instructions related to safety in the work place provided that the instructions given were given in writing and displayed at places (for an illiterate employee, he/she has to be informed verbally);
  • Absents him/herself without any lawful excuse for no less than twenty intermittent days or more than seven days in a period of one year;
  • Commits an assault onto the employer, director, manager, or any colleague during its time of providing service to the employer;
  • Is found to be under the influence or drunk while performing work duties or during working hours;
  • Is awarded by a competent UAE court final judgment with respect to an offense prejudicing the honor or honesty of the employee

If you want to know more regarding arbitrary dismissal and wrongful termination, talk to HHS Labour lawyers in UAE, employment lawyers in Dubai.

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