The UAE Labour Law shields workers against arbitrary dismissals and offers fair terminations. The law lays out valid grounds for contract termination, which include contract expiration, mutual agreement, and serious acts of misconduct. Employers and employees should equally respect notice periods and observe legal procedures, which compensate for illegal terminations.
The UAE is one of the most vibrant employment markets globally, where there is great demand for an influx of competent professionals from everywhere. Foreign workers have contributed much to the speedy development of the national economy of the UAE. However, all this requires an accompanying preparation of appropriate and clear laws on employment that safeguard workers’ and employers’ rights.
The UAE’s Labor Law, with particular regard to the termination of contract of the employment and in preventing arbitrary dismissal, has a central role to play in maintaining a just and balanced workforce.
Understanding the provisions of the UAE Labour Law is important for job seekers, employers, and HR professionals alike in ensuring a transparent, lawful, and fair termination process. This blog will break down the key aspects of UAE Labour Law concerning employment contract termination and protection against arbitrary dismissal, thus enabling workers and employers to be informed about their legal rights and obligations.
Overview of UAE Labour Law and Worker Protection
According to Federal Law No. 33 of 2021, UAE Labour Law makes, besides other things, certain prescriptions about termination of employment contracts with due observance of the protection against unmeritorious treatment of employees and their arbitrary dismissal. It was designed with the intention of job security with fair treatment of employees without hampering the flexibility necessary to administer a business. The law applies to both limited-term and unlimited-term contracts and has clearly outlined the legitimate grounds for termination, as well as the procedural safeguards to be observed.
Understanding the Grounds for Termination of Employment
Under UAE Labour Law, an employment contract can be terminated on various grounds; however, valid reasons are accepted in order to prevent arbitrary dismissal. Some of the key grounds include the following:
- The end of the contract: If the period of the employment contract has expired and it has not been extended or renewed, the employer can dismiss the contract without any liability.
- Mutual Agreement: This can be through mutual written consent by both parties. This needs to be in writing for transparency and equity.
- Worker’s Death or Inability to Work: The contract can also be terminated upon the basis of a medical certificate if the worker happens to die or becomes permanently unable, due to health reasons, to perform his duties.
In addition, if the nature of the business is closely related with the personal involvement of the employer himself and he dies, his employment contract may be thus terminated.
- Business Closure or Bankruptcy: If the business is closed permanently, or the employer goes into bankruptcy or insolvency, employment contracts may be terminated.
- Failure to Renew Work Permit: If the worker fails to renew their work permit or visa for reasons beyond the employer’s control, the contract may be terminated.
For any such instance, the legal procedural requirement in this respect will be that termination shall take into account the legal procedures according to UAE Labour Law and ensures rights are well guarded between parties.
Role of Notice Period for Termination
In general, a notice period represents one of the fundamentals under the UAE Labour Law on employment terminations. Each party should provide the notice period against their respective employers unless termination of contract has taken place for grave reasons.
Employers:
If an employer wants to terminate an employee on legitimate grounds, he has to do so in writing and give a notice period. The notice period usually is one month (30 days) or three months (90 days), depending on the conditions of the employment contract. In this period, the employee has to perform his duties as required by the contract. If the employer does not comply with this period of notice, then they must pay an allowance to the worker, amounting to the wage of the worker for the notice period.
For Employees:
An Employee can also terminate his/her contract upon giving notice in writing and serving the period of notice. In case an Employer fails to fulfil any terms of the contract, e.g., failure to give a safe working environment and failure to pay wages the contract can be terminated without the need for notice.
Termination by Employer Without Notice
The employers have the right to terminate the contract of an employee without serving the notice period in some conditions. But for this, the employer needs to have a valid, legally recognizable reason. The grounds for immediate dismissal without notice are as follows:
- Fraudulent Behavior: If the employee submits forged documents or adopts a false identity.
- Gross Negligence: If the employee’s actions cause significant damage to the employer or the workplace.
- Violation of Safety Regulations: If the employee violates written or verbally communicated safety instructions.
- Absenteeism: If the employee is absent without a lawful excuse for over 20 intermittent days or 7 consecutive days in a year.
- Drunkenness or Substance Abuse: If the employee is found under the influence of alcohol or illegal drugs during work hours.
For these cases, the employers must investigate writing and cite the reasons for dismissal. This should be informed to MoHRE within seven working days following the date of dismissal.
Arbitrary Dismissal: What You Need to Know
Arbitrary dismissal means the discharge of an employee without any valid cause or not under the procedures laid down by the UAE Labour Law. Such a dismissal is illegal, and the employee is entitled to compensation. Common causes of arbitrary dismissal may include:
- Filing Grievances or Lawsuits Against the Employer: No employer can terminate an employee based on filing a valid complaint or lawsuit against the employer. Union
- Activity or Legal Rights: Terminating an employee for engaging in union activities or exercising one’s legal rights is arbitrary.
If an employee is dismissed arbitrarily, he or she can seek compensation through the court. Compensation is determined in accordance with the nature of the employee’s work, the damage caused to the employee, and the length of employment. However, it shall not exceed three months’ salary, calculated based on the employee’s last received wage.
Apart from this, employees may also claim end-of-service gratuity and all other unpaid dues, which include Severance pay and notice period compensation.
Legal Protection against Arbitrary Dismissal
UAE Labour Law has multiple protections set up to ensure that one is not arbitrarily dismissed. These are:
- The Right to Complain to the MoHRE in case of unfair dismissal- Employees can write to MOL in their complaint with the MoHRE.
- Compensation for Unlawful Termination: In case of arbitrary termination, employees are entitled to compensation for their loss, including up to three months of salary.
- Principles of Job Security and Worker Protection: Workers are protected against discrimination, harassment, and unfair treatment. Any such termination on these grounds will be considered unlawful.
This ensures that no employee is victimized and that dismissal is done on valid and lawful grounds.
Working for Another Employer After Termination
After the termination or expiry of a contract, an employee may seek employment with another employer. However, there are a few important points to note:
- Employees may obtain a new work permit and residency as long as their previous contract was terminated lawfully and not during the probation period, or if there was no report of work abandonment.
- The employees who cancel the contract before the probation period is over, without a valid reason, may be restricted from getting a work permit for a year or so.
Conclusion
The UAE Labour Law offers extensive protection to workers by ensuring that termination is not done arbitrarily and that the rights of employees are protected. Employers should follow the proper procedures, while employees must be fully aware of their rights, especially those relating to termination and the possibility of arbitrary dismissal. If either party is aware of the legal framework behind termination and dismissal, both can ensure fair treatment, job security, and avoid legal disputes.
Whether you are a job seeker, employer, or HR professional, being updated on the UAE Labour Law’s nuances will help one thread their way with confidence through the employment landscape. The knowledge not only guarantees compliance but also secures a healthier and more transparent working environment for one and all.
Frequently Asked Questions
- On what grounds can an employee be terminated according to UAE Labour Law?
Ans. It may be due to the expiration of the contract, mutual agreement, death of the worker, or bankruptcy of the employer. Each one of them has to be executed by following the appropriate legal procedures.
- Can an employer terminate an employee without notice in the UAE?
Ans. Yes, an employer can terminate an employee without notice for serious offenses like fraud, gross negligence, or violation of safety regulations, provided proper documentation and investigation are carried out.
- What is deemed arbitrary dismissal in the UAE?
Ans. Arbitrary dismissal takes place when an employee is dismissed for no legitimate reason or under any legitimate grounds, including the retaliation acts against a worker on filing complaints or claiming their rights.
- On what basis can an employee claim compensation for arbitrary dismissal?
Ans. An employee who has been arbitrarily dismissed is entitled to claim compensation against his lost salary, end-of-service gratuity, and other dues that have not been paid. Compensation for arbitrary dismissal shall not exceed three months’ salary.
- Can an employee work for another employer after termination?
Ans. Yes, an employee may seek work with another employer after termination, provided he has followed the proper legal procedures and no work abandonment report has been filed.
- What is the notice period for termination in the UAE?
Ans. The notice period ranges from 30 to 90 days, depending on the employment contract. Both parties are bound to serve this notice unless termination is due to serious misconduct.