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Labor Law
When is Termination Unjust in UAE Labor Law?
Many employees suddenly find themselves facing a decision to terminate their service, and ask: was this a "wrongful dismissal" that entitles them to compensation? And what should be done to claim their rights? The truth is that the UAE legislator has established a precise framework distinguishing lawful termination of a contract from termination that contravenes the law, attaching to each specific financial and procedural consequences. In this article we explain when your dismissal is considered contrary to the law, what compensation you are entitled to, and most importantly: the practical steps you must take to recover your rights in full.
When Is an Employee's Dismissal Considered Wrongful Under UAE Labour Law, and What Steps Should They Take to Recover Their Rights?
First: What Is "Wrongful Dismissal"? And the Difference Between It and Unlawful Termination
"Wrongful dismissal" is a term commonly used by the public, while the legal term adopted in the legislation on the regulation of employment relations is "unlawful termination of the employee's service." The law has defined this description narrowly and precisely: the termination of an employee's service by the employer is deemed unlawful if the reason for termination is that the employee filed a serious complaint with the Ministry of Human Resources and Emiratisation, or brought a case against the employer that proved valid. In other words, the law specifically protects the employee from "retaliatory termination" that comes in response to their pursuit of their rights before the competent authorities.
By contrast, the law requires that the termination of an employment contract by either party be "for a legitimate reason," and be preceded by a written notice to the other party. If the employer terminates the contract without a legitimate reason, or without observing the notice, or in the cases protected by law, the employer bears the consequences of that in terms of compensation and entitlements, as we shall explain.
Summary of the difference:
"Termination for a legitimate reason" is a valid termination, provided the notice and entitlements are observed; whereas "unlawful termination" is a termination that contravenes the law and entails fair compensation that is added to the remaining rights and does not reduce them.
Second: When Is Termination Lawful and When Is It Contrary to the Law?
The law on the regulation of employment relations sets out the cases of contract termination, distinguishing between termination by notice, dismissal without notice in specified cases listed exhaustively, and the employee's right to leave work while retaining their rights. Knowing these limits is the key to assessing whether your dismissal contravenes the law.
1) Termination by Notice (the General Rule)
Either party to the contract may terminate it for a legitimate reason, provided the other party is notified in writing and continues to work during the notice period agreed upon in the contract, on condition that this period is not less than thirty days and not more than ninety days. A party who fails to observe the notice period must pay the other party a "notice allowance" equal to the employee's wage for the whole notice period or the remaining part of it.
2) Cases of Dismissal Without Notice (Exhaustive)
The employer may not dismiss an employee without notice except after a written investigation with the employee, by a written and reasoned dismissal decision, and in cases listed exhaustively, the most notable of which are:
Impersonating another person or submitting forged certificates or documents.
Committing an error resulting in gross material loss, or deliberately damaging the employer's property.
Disclosing work secrets relating to industrial or intellectual property in a manner causing losses.
Assaulting the employer, the responsible manager, superiors or colleagues by word or deed.
Absence without a legitimate reason for more than twenty intermittent days in one year, or more than seven consecutive days.
Joining work at another establishment without observing the prescribed controls.
If the employee is dismissed without notice outside these cases, or without a written investigation and a reasoned decision, the dismissal becomes subject to challenge, and the employee is entitled to claim their entitlements and the notice allowance, in addition to compensation if the conditions of unlawful termination are met.
3) Cases Where the Employee May Leave Work Without Notice While Retaining Their Rights
Conversely, the law permits the employee to leave work without notice while retaining all their rights upon the end of service in certain cases, including:
• The employer's breach of its obligations set out in the contract or the law, provided the Ministry is notified at least fourteen working days before leaving work, and the employer does not remedy the breach despite being notified.
• Proven assault by the employer or its representative against the employee, or the employee's exposure to violence or harassment during work, with notification of the competent authorities and the Ministry within five working days.
• The existence of a serious danger threatening the employee's safety or health, of which the employer was aware and took no action to remove.
• Assigning the employee a task fundamentally different from what was agreed, without their written consent, outside cases of necessity.
Third: Compensation and Financial Entitlements Upon Unlawful Dismissal
The law attaches to unlawful termination a fair compensation, in addition to a set of entitlements that remain with the employee regardless of the reason for termination. The most notable of these are:
3
Months Maximum
Compensation for unlawful termination is assessed by the court and does not exceed the employee's wage for three months calculated on the last wage.
14
Days to Settle
The employer must pay the wages and all entitlements within fourteen days from the date the contract ends.
21 / 30
Days per Year
End-of-service gratuity for the foreign employee: 21 days' wage for each of the first five years, and 30 days for what exceeds that, on the basic wage.
What remains for you in addition to compensation?
• Notice allowance if the contract was terminated without observing the notice period, calculated on the last wage.
• End-of-service gratuity due under the law to anyone who has completed one year or more of continuous service, not exceeding in total two years' wage for the foreign employee.
• Unused annual leave balance, and any other wages or entitlements stipulated by the contract or the law.
• Invalidity of the non-competition clause if the employer terminated the contract in breach of the provisions of the law.
In assessing the fair compensation, account is taken of the type of work, the extent of harm sustained by the employee, and the duration of their service. Compensation for unlawful termination does not prejudice the employee's right to the notice allowance and end-of-service gratuity due to them.
Fourth: The Steps the Employee Must Take, Step by Step
The law has organized the path for settling individual labour disputes through an expedited track that begins at the Ministry before resorting to the courts. The steps, in order, are as follows:
Step 1 — Document the Incident and Gather Documents
Keep the employment contract, wage statements, the dismissal or notice decision, and any correspondence relating to the termination of service. The employee may prove the employment contract, the amount of the wage, and their rights by all means of proof.
Step 2 — File a Complaint with the Ministry of Human Resources and Emiratisation
The employee (or anyone entitled on their behalf) submits a request to the Ministry, which undertakes to examine the request and take what it deems necessary to settle the dispute amicably between the parties.
Step 3 — The Ministry's Decision on Claims Up to AED 50,000
If amicable settlement is not reached, the Ministry decides the dispute by a decision where the value of the claim does not exceed fifty thousand dirhams, or where the dispute concerns the non-compliance of one of the parties with a prior amicable settlement decision (regardless of value). This decision has the force of an executory instrument and is stamped with the executory formula.
Step 4 — Challenge Before the Competent Court of First Instance
Either party to the dispute may file a case before the competent Court of First Instance within fifteen working days from the date of being notified of the Ministry's decision. The court sets a hearing within three working days from registering the case and decides it within thirty working days. The judgment issued by the Court of First Instance on the merits of the dispute is final, and filing the case results in suspending the execution of the Ministry's decision.
Step 5 — Referral to the Court for Claims Exceeding AED 50,000
In cases other than those decided by the Ministry, and where amicable settlement is not reached, the Ministry refers the dispute to the competent court accompanied by a memorandum containing a summary of the dispute, the parties' arguments, and the Ministry's recommendation; the court then decides it expeditiously.
Important safeguards while the dispute is ongoing:
• The Ministry may oblige the employer to continue paying the employee's wage for a maximum of two months if the dispute has caused the suspension of payment of the wage.
• A case is not admissible before the Court of First Instance without observing the prescribed procedures and deadlines; passing through the Ministry first is a condition for filing the case.
Mind the Limitation Period
A claim for any right arising under the law shall not be heard after the lapse of two years from the date the employment relationship ends.
Fifth: Exemption from Judicial Fees and Safeguards That Cannot Be Waived
The law has eased the burden of litigation on the employee and fortified their rights by rendering void any waiver of them. Among the most notable of these safeguards:
Exemption from fees: labour cases are exempt from judicial fees at all stages of litigation and execution, for claims filed by employees or their heirs not exceeding one hundred thousand dirhams in value.
A minimum that is not diminished: the rights established in the law represent the minimum, and any release, settlement, or waiver of the rights arising for the employee is void if it contravenes its provisions.
Protection from retaliation: termination is deemed unlawful if it is due to a serious complaint to the Ministry or a case that proved valid.
Priority over the employer's assets: the employee's entitlements enjoy a priority lien over the employer's assets, satisfied after sums due to the public treasury and the legally awarded maintenance.
Frequently Asked Questions
Legal References
• Federal Decree-Law No. (33) of 2021 on the Regulation of Employment Relations — Federal Decree-Law.
• Federal Decree-Law No. (20) of 2023 Amending Certain Provisions of Federal Decree-Law No. (33) of 2021 — Federal Decree-Law (amending).
• Federal Decree-Law No. (9) of 2024 Amending Certain Provisions of Federal Decree-Law No. (33) of 2021 — Federal Decree-Law (amending).
• Cabinet Resolution No. (1) of 2022 on the Implementing Regulation of Federal Decree-Law No. (33) of 2021 — Cabinet Resolution (Implementing Regulation).
• Federal Law No. (13) of 2016 on Judicial Fees Before the Federal Courts — Federal Law.
Legal Disclaimer
This content is published as part of efforts to spread legal culture and community awareness. It is general and informational in nature, does not constitute legal advice for any specific case, and legislation or the details of its application may change. Each case has its own circumstances that warrant independent study. For precise advice regarding your situation, please contact AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS. In case of any discrepancy in this translation, the Arabic text shall be the authoritative reference.
