Arbitrary Dismissal & Compensation

Arbitrary or unfair dismissal takes place when an employer terminates an employee or forces him to resign without any justifiable reasons.

According to Article 122 of the UAE Labour Law, arbitrary termination of an employee happens when an employee is fired for reasons not related to work performance, or when the employee files a valid complaint against an employer, which made the latter terminate him maliciously.

ARTICLE 122 OF UAE LABOUR LAW SAYS….

“The termination of the employment of the worker by the employer shall be deemed arbitrary should the cause of termination not be related to the work, in particular, should the termination of the employment of the worker be made by reason of the filing by the latter of a serious complaint before the pertinent authorities or a valid claim against the employer.”

Article 120 of the UAE Labour lays out the reasons for which termination without notice is lawful.
If an employee believes that he has been dismissed illegally, he can complain to Ministry of Human Resources and Emiratisation. The ministry will try to solve the issue amicably. If an amicable settlement is not reached, the case will be referred to the respective court.

ARTICLE 120 OF UAE LABOUR LAW SAYS…

The employer may dismiss the worker without prior notice in any of the following cases:
a – Should the worker assume false identity or nationality, or submits false certificates or documents.
b – Should the worker be appointed under probation, and the dismissal occur during or at the end of the probation period.
c – Should the worker commit an error resulting in colossal material losses to the employer, provided that the Labour Department is notified of the incident within 48 hours of the knowledge of the occurrence thereof.
d – Should the worker violate the instructions related to the safety at work or in the work place, provided that such instructions be written and posted in a prominent location, and that he is notified thereof should he be illiterate.
e – Should the worker fail to perform his main duties in accordance with the employment contract, and fail to remedy such failure despite a written investigation on the matter and a warning that he will be dismissed in case of recidivism.
f – Should he divulge any of the secret of the establishment where he works.
g – Should he be convicted in a final manner by the competent court in a crime of honour, honesty or public ethics.
h – Should he be found in a state of drunkenness or under the influence of a narcotic during work hours.
i – Should he assault during the work the employer, responsible manager or co-worker.
j – Should he be absent without valid cause for more than twenty non-consecutive days in one year, or for more than seven consecutive days.

As per Article 123 of the UAE Labour Law, if arbitrary dismissal is proven, the court will order the employer to pay a compensation to the employee. The court will assess the value of compensation taking into account the type of work, the extent of damage incurred to the employee and the duration of the employment. In all cases, the amount of compensation must not exceed the wage of the employee for a period of three months, calculated on the basis of the last wage the worker is entitled to.

ARTICLE 123 OF UAE LABOUR LAW SAYS…

As amended by Federal Law no. 12 dated 29/10/1986:
a – Should the worker be arbitrarily dismissed, the competent court may order the employer to pay compensation to the worker. The court shall assess such compensation, taking into account the type of work and the extent of damage incurred to the worker as well as the duration of employment and after the investigation of the work conditions. In all cases, the amount of compensation shall not exceed the wage of the worker for a period of three months calculated on the basis of the last due wage.
b – The provisions of the preceding paragraph shall not breach the right of the worker to the gratuity entitled thereto and the compensation in lieu of notice provided for herein.
In addition to compensation, the employee can claim his gratuity, notice period dues or any other unpaid dues he is entitled to from his employer.

We do represent Employees (not Employers) across all emirates in the United Arab Emirates for all kinds of cases with respect to employment issues and disputes. We can guarantee you to get your claim in your hands within a short span including the deserved compensation, if you are arbitrarily dismissed or terminated on the grounds of redundancy whether your contract is limited or unlimited, whether the company is in main land or free zone, whether the company is semi government or governmental organization. Our experts in human resources and lawyers are well versed in UAE’s relevant laws hence we give appropriate advice to our clients and represent in relevant tribunals and courts. We work on the concept of “No win, No fees”. We charge you a small advance upfront and the balance will be charged only when the claim is awarded. We can get the employee his/her all End of Benefits (Gratuity, Leave salary, Repatriation charges, any other dues like Unpaid salaries, Overtime, etc.), Notice period pay (mentioned on the labour contract) without working and 3 months Gross Salary as compensation regardless of the nature of the contract (Limited or Unlimited) and regardless of the structure of the organization (Main land companies, Free zone companies, Semi-Government organizations or Government organizations)

REDUNDANCY IN UAE

‘Drastic time calls for Drastic Measures’ In such a situation of economic uncertainty, employers are always considering implementing cost cutting including reducing their payroll costs. In UAE, the Federal UAE Labour Law no (8)of 1980 (UAE Labour Law) does not make express reference to the concept of redundancy. Redundancy is a sensitive and challenging topic in any jurisdiction. For companies operating in the UAE (including within the DMCC Free Zone), the issue is particularly complex and not setting out any express statutory definition of redundancy or a redundancy procedure.

As redundancy is not a defined statutory term, there is often a lot of uncertainty and misunderstanding around the legal approach to redundancy within the UAE. Although there is no statutory concept of redundancy, the Courts have in the past acknowledged that where businesses dismiss an employee for a cost-saving reason; this can amount to a legally fair and valid reason for dismissal under Article 117 of the UAE Labour Law.

Under Article 117 of the UAE Labour Law, a company may terminate an unlimited term employment contract for a valid reason at any time by providing at least 30 calendar days’ notice of termination to the employee (or longer if the employment contract provides for a longer notice period). It is important to note that Article 117 applies to the terms of an unlimited term employment contract and not a fixed-term employment contract.

Under the UAE Labour Law an employee on an unlimited term contract may only be legitimately dismissed:

(a) By the provision of notice in line with the terms of the employment contract provided that the employee is dismissed for a valid cause (which must be connected to the employee’s work); or

(b) In accordance with the provisions of Article 120 of the UAE Labour Law which provides a list of instances where an individual may be summarily dismissed (for cause).

Moreover, the UAE Labour Law specifically provides that any termination of an employment contract which is not for a valid reason (for example, performance or misconduct), or for any of the reasons listed under Article 120, is deemed to be arbitrary.

TERMINATION OF UNLIMITED CONTRACT: THE MYTH & THE FACT

Confusion always arises when it comes to the termination of an unlimited contract – especially amongst employers. There are numerous employment myths often relied upon either to the disadvantage of the employer or the employee. One of these myths is that an employer is free to terminate an unlimited employment contract, after giving the prescribed notice, without any reason whatsoever. This myth actually stems from the wrong interpretation of Article 117 of the Employment Law. Article 117 which reads as follows:

“1- Both the Employer and the Employee may terminate a Contract of Employment of unlimited period for a valid reason at any time following its conclusion by giving the other party notice in less than 30 days before the termination.

2- In case of Employee working on a daily basis the period of notice shall be as follows:

a) one week if the Employee has been employed for more than six months but less than one year; b) two weeks, if the Employee has been employed for not less than one year; c) one month if the Employee has been employed for not less than five years.”

A careful reading of the Article above will reveal that an employer’s right to terminate an unlimited contract is not free but rather conditional on the existence of a “valid reason” for such termination. This requirement has been stressed in section 3 of Article 113 that the unlimited contract may be terminated mutually by either party only: “if the provisions of the law regarding the period of notice and valid grounds for termination are observed”.

The inquiry will then be on what is considered to be a valid reason for terminating an unlimited contract, what is the criteria for specifying or determining such valid reason and who has the authority to determine whether a reason for termination is valid or not?

We have already established that a contract of employment (whether limited or unlimited) may be terminated by employers with immediate effect for reasons provided in article 120 of the Employment Law. Other than these situations, the Employment Law provides that a valid reason for terminating an unlimited contact should be any reason that is “work related”. Article 122 of the Employment Law provides the following:

“A worker’s service shall be deemed to have been arbitrarily terminated by his employer, if the reason for the termination is irrelevant to the work, and more particularly, if the reason is that the worker has submitted a serious complaint to the competent authorities or has instituted legal proceedings against the employer that have proven to be valid”.

From the above, it is clear that the right of termination of an unlimited contract under the Employment Law is not an unfettered right and is subject to the requirement that an employer demonstrates the existence of a valid reason for such termination.

“We do represent Employees across all emirates in United Arab Emirates with respect to employment issues & disputes…We work on the concept of ‘No win, No fees’…We guarantee you to get your claim in your hands that too in a short span with an additional compensation.”

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