Is Your Dismissal Arbitrary Under UAE Law?

In the UAE (considering all free zones in the UAE other than the DIFC and ADGM), private businesses are required to follow UAE Federal Law No. 8 of 1980, UAE Labor Law the foremost enactment with respect to employment matters in the UAE. The Labor law govern all sorts of issues which may arise between the employer and employee. Wherein, Employment Lawyers of Dubai will discuss the aspects of arbitrary termination of employees in UAE.

Arbitrary Dismissal Defined

In other words, arbitrary dismissal is known as “unfair termination” wherein an employer chooses to lay off an employee without any reasonable ground. This sort of excusal is as a rule contrary to the guidelines set in by the UAE Labor Law. Thus, it is considered as an arbitrary dismissal, thereby allowing the employees to register complaint or a case before the labor courts for seeking compensation for the arbitrary termination. Nevertheless, it is significant for all the employees to understand the scenarios where your termination can be considered as arbitrary.

Article 122 of the UAE Labor Law states that any termination of an employee without any reasonable ground or on a ground unrelated to work authorizes the employee to register a complaint against the employer for unfair dismissal. In this regards, it is important to note that the word arbitrary is vague and the law has not mentioned the grounds in which any dismissal will be arbitrary. Therefore, there are several cases as witnessed by Labor Lawyers in their past experience such as if in any circumstance, an employee was terminated due to the loss suffered by the company, and the company shall report such loss immediately (within 48 hours) to Ministry of Human Resource and any failure to report such incident will allow the employee to register a case for arbitrary dismissal from the employment.

Secondly, demotion in the position of the employee with reduction of salary can be taken into consideration as arbitrary dismissal allowing the employee to register a complaint, however, decision in this regards is completely a discretion of the court, depending upon various factors, which can be explained to you by your Employment Lawyer. In another circumstance, where the employer forces the employee to serve resignation, by misusing his position or by coercion. In such cases, if the employee proves such threats by way of witnesses or some documentary evidence, the court may issue a judgment in his/her favor.

The maximum amount of compensation that can be granted to a labor/employee in cases of established arbitrary dismissal is three months’ compensation on the basis of the last full salary withdrawn by the employee.  In addition, the court may consider any additional bonus the employee use to receive during his employment as part of monthly salary. However, the amount of compensation will be determined by the court along with the cost of initiating the court procedure.



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