UAE is one of the hottest job markets in the world. Hundreds of people come to UAE every year in the hope of making bigger careers. The people-friendly work environment, work-life balance, and handsome pay cheques are the primary reasons for the large expat population. Moreover, carefully formulated labour laws in UAE ensure labour market remains conducive to both employers and employees.
The latest amendment in labour law that came into effect on 2nd February 2022 also indicates how the UAE government is constantly evolving the law to suit global standards. The amendment touched upon all aspects of employment law, including eliminating unlimited contracts, leave provision, introducing a new working week, minimum wage, and termination. It aims to safeguard the rights of all working people from the public and private sectors.
The new laws also brought several new guidelines for the termination of an employee in the private sector. The Federal Law no. 8 of 1980 (regulates employment relations in the UAE), the Federal Law no. 6 of 1973 (Immigration and Residence) all the amendments, and Federal Decree-Law no. 17 of 2017 (Immigration Law) cover in detail all the rights enjoyed by employees when they are terminated from work. There are three conditions for the termination of an employee before the completion of the contract:
- If the term of the contract is expired and not renewed
- If both parties mutually agree to terminate it
- If the employee commits a violation as mentioned in Article 120 of labour law.
As per the UAE labour law, the employer must make immediate payment of EoSB to the employee upon termination of the contract, except for the cases where the termination is due to gross misconduct.
Depending on the basis of termination, the employees can either enjoy the benefits or perform some legal obligations. Below are the rights of employees who are terminated before the maturity of their employment contract:
1. End of service benefit
The employers should immediately pay end of service benefits (EoSB) to the employee, except where the termination is due to gross misconduct. All employees who have completed one year of service become eligible for gratuity or EoSB. According to Article 132 of employment law, the end of service remuneration is calculated as follows:
- 21 days’ pay for each year of the first five years of service.
- 30 days’ pay for any additional year.
Days, where the worker has taken leave without pay, are not calculated in a service period. The employees are also entitled to get cash in lieu of unused leaves.
2. Transportation expenses
If you are fired from the job, according to Article 79 and Article 131 of the employment law, the employer needs to bear the employee’s airfare for returning to their home country.
3. Grace period
The UAE government provides 30 days grace period after the cancellation of an employment visa. A new amendment is proposed to extend the grace period to 180 days (till the date this article was published, the amendment was not enforced). In some cases, you can also request your employer not to cancel your residence visa till you find another work. However, it entirely depends on your employer whether to permit or not.
4. Dues and receivables
Your dues and receivables may vary based on how you are terminated. If you are terminated due to cost-cutting (redundancy), you receive only the gratuity pay and/or notice period compensation. Employers must compensate you with gratuity and other dues if you are wrongfully terminated.
5. Notice period
All employees intending to leave the organization must serve a notice period that is agreed upon while entering the contract. If the employee leaves the company without serving the notice period, they must compensate the employer. The same goes for the employer. In UAE, the maximum limit of the notice period is set to 3 months. Your employer has no legal right to prevent you from leaving the company after you serve 3 months notice period. The employee is entitled to receive full wages during the notice period.
In some cases, the employee can also terminate the contract without serving the notice period if:
- The employer fails to pay wages for a period of more than 60 days.
- The employee has filed a court complaint against an employer who has failed to employ the employee.
- The final ruling for a complaint is in favour of the employee (referred to labour court by MOHRE).
6. Notice period during probation
During probation, both employer and employee need to provide written notice of 14 days, showing the intent to terminate the job. If the employer breaches the rule of 14 days’ notice, they must compensate the employee financially.
7. Termination during leave
If either party wishes to terminate the contract during leave, the calculation of the notice period commences only after the employee returns to work. However, if you have already agreed otherwise in the agreement, the calculation can start during leave.
8. Leave during notice period
In case you get fired from your job, you are entitled to one-day leave during the notice period to look for another job.
9. Medical reasons
Employers cannot dismiss an employee for medical unfitness unless he or she exhausts all their legal leaves. Any agreement against this is considered void.
The above were the rights and obligations of employees when they are terminated legally with proper notice. However, there are instances where the employer terminates the contract without any notice. In some cases, the employers are in legal limits to perform such actions when the employee does gross misconduct. When the employees are terminated unfairly, it is called Arbitrary or unfair dismissal.
Termination of Contract for Gross Misconduct by the Employer
An employer can fire an employee without notice under the following conditions. If the employee:
- Submits false identity or nationality.
- Forged documents and certificates.
- Commits an error that causes significant material loss to the employer, provided it is intimated to the Labour Department within 48 hours from the finding of the error.
- Violates the safety instruction of the workplace, provided the instructions are displayed in writing and explained if the employee is illiterate.
- Fails to perform the main duties described in the job description and continues to do so even after warning of dismissal and formal investigation.
- Shares the secrets of the organization where he works.
- Convicted by the competent court for the offense related to honour, honesty, or public ethics.
- Found to be inebriated with alcohol or prohibited drugs during work hours.
- Assaults the employer, manager, or other colleagues.
- Absent without a reasonable cause for 20 intermittent days or 7 successive days in a year.
What happens when you are terminated unfairly in UAE?
Arbitrary or unfair dismissal occurs when an employer forces their employees to resign or unfairly terminates the contract without justifiable reasons. As per Article 122 of the UAE labour law, the Arbitrary dismissal happens when:
- the employee is fired for a reason unrelated to work performance, or
- employer fires the worker with malicious intentions when the employee files a complaint against the employer.
If you feel you are terminated unfairly, the law provides you with ways to protect your rights. You can complain to the MOHRE. At first, the authorities try to solve the matter amicably. When amicable settlement seems impossible, the case is referred to the labour court. As per Article 123 of the UAE labour law, if the court finds the termination is unfair, the court can order the employer to pay compensation to the employee. The court decides the value of compensation, and it must not exceed an employee’s 3 months’ wages. The wage amount referred here is the last wage employee has received or is entitled to receive. Additionally, the employee is also entitled to receive gratuity, notice period dues, and all unpaid dues.
How can you raise a wrongful work termination case in UAE?
All legally serving employees in UAE have the right to raise their case with MOHRE. There are multiple ways to file a complaint. You can register your complaint on the MOHRE website or call the helpline number 800 60, or you can download the MOHRE app and follow the guidelines. To initiate the process, you will be asked to create an account first, with the help of your Emirati Id.
Alternatively, you can seek the help of experienced labour lawyers in the UAE who have expertise in dealing with unfair dismissal.
The UAE legal system provides its valuable working population with a just and friendly working environment. The organizations operating in the country also benefit from the fair rules and regulations related to employment—moreover, the multiple departments like MOHRE where both employer and employee can raise a complaint. Hiring a labour law advocate is also advised in such situations. Suppose the case is not resolved at the MOHRE level; they can represent your case aggressively in labour courts. Our competent team of lawyers has years of dealing with dismissal cases. Get in touch to discuss your case. You can book an online consultation, phone consultation, or visit our offices.