Understanding Termination of Employment: An Arbitrary Dismissal in the UAE

In the UAE, an employment contract termination involves a set of consequences and rules for employers and employees. In this article, we clarify the circumstances on which an employment contract ends. We will also shed light on the concept of arbitrary dismissal and its implications.

Employment Contract Termination: Situations for Employees in the UAE

According to the UAE Labor Law, it specifies various situations in which an employment contract may be terminated. These include

●      Contract expiration

●      Mutual agreement, or

●      Either party's decision to end it with notice provided the provisions are observed.

Employment contracts are terminated under various circumstances in the United Arab Emirates. It is regulated by UAE Labor Law. We are discussing few situations in which an employment contract is terminated:

Contract Term Expiration: In expiration of employment contract term and is not extended or renewed, then the contract is subjected to be considered terminated.

Mutual Agreement: If both parties agree mutually, an employment contract may be terminated. This should be in documented form and signed by both employee and employer

Termination Notice: Both parties can terminate the contract with notice. As per the employment contract, they must observe the termination provisions. It also includes the notice period agreed upon.

Employer Death: The contract may be terminated in the event of the employer's death. It is necessary that the employment contract is related to the deceased person.

Employee Death or Inability: If the employee passes away or is unable to work, the contract may be terminated. It is required to be confirmed by any medical entity

Criminal Penalties: If an employee faces final court judgment, then the employment contract is terminated. It involves a freedom-restricting penalty for a period of not less than three months.

Establishment closure: If the establishment is permanently closed, the employment contracts will be terminated.

Bankruptcy/Economic Reasons: The employer can terminate employment contracts due to economic reasons. It includes bankruptcy, insolvent, or exceptional reasons

Failure to Renew Work Permit: If the worker fails to meet the conditions for work permit renewal, the employer may terminate the contract.

In the UAE, these situations provide the legal framework for employment termination. It's crucial for both parties to be aware of their rights and responsibilities. It include adhering to notice periods and the applicable provisions of the UAE Labor Law.

Termination Notice Period:

The UAE Labor Law states that termination can occur with a legitimate reason. It should be a written notice ranging from 30 to 90 days. During the notice period, employees are entitled to their full wages as per the contract. The party failing to serve the notice period must pay a "notice period" allowance.

Termination Without Notice by the Employer:

The Labor Law allows employers to terminate contracts without notice in specific cases. The cases such as false identity, substantial material loss, or violating safety instructions. The law mandates a written investigation notice for such terminations.

An employer may terminate an employee's contract without providing notice in specific circumstances. It includes situations where the employee's actions constitute an employment contract breach. Here are the circumstances of an employment contract termination without notice:

●      False Identity: If an employee adopts a false identity or submits forged documents or employer certificates. This can be considered a breach of trust and may lead to contract termination.

●      Substantial Material Loss: If an employee's actions result in substantial material loss to the employer. The employer has the right to terminate the contract without notice. The loss must be significant and directly attributed to the actions of the employee.

●      Violation of Safety Instructions: If an employee violates safety instructions. Also, in the case of written instructions, these instructions are displayed in the workplace. In these circumstances, the employer may terminate the contract without notice.

●      Failure to Perform Duties: If an employee fails to perform their duties. If despite having received warnings of dismissal. The employer can terminate the contract without notice. It is applicable when the employee's repeated violations have an impact on their job.

●      Company Secrets Disclosure: If an employee misuse any confidential information about the establishment. That results in financial losses or missed business opportunities. The employer may terminate the contract without notice.

●      Unlawful Activities: Termination may occur if an employee is drunk during working hours. Also, if they engage in actions that breach public morals at the workplace. Then employer terminates the contract without notice

●      Physical Assault: If an employee physically assaults the employer, or any colleagues during work. The employer can terminate the contract without notice.

●      Unexcused Absence: If an employee is absent from work without a lawful excuse. If it occurs for more than 20 intermittent days or more than 7 successive days within a year. The employer has the right to terminate the contract without notice.

●      Illegal Exploitation: If an employee exploits their position for personal gain illegally. This can lead to contract termination without notice.

●      Joining Another Establishment: If an employee joins another establishment. The employer may terminate the contract without notice.

The UAE Labor Law stipulates that the employer may terminate the contract. They do so without notice after conducting a written investigation of the worker. On the other hand, providing a written and justified notice of dismissal to the employee. It ensures that the termination process follows due process.

Termination Without Notice: By Employee Termination

Article 45 permits employees to terminate their contracts without notice. They can do so if the employer fails to meet:

1. Contractual obligations,

2. Harasses the worker

3. Assigns fundamentally different work, or neglects safety and health factors. Proper notification and legal procedures are necessary for this.

Employees have the right to terminate their employment contracts without notice. But in certain circumstances as specified in Article 45 of the UAE Labor Law. It outlines the situations in which an employee can terminate contract without notice:

●      Failure to Meet Obligations:
An employee terminates contract without notice if the employer fails to meet obligations. This may include the employer not fulfilling the promises or obligations outlined. The obligations that are outlined in the employment contract or violating labor laws.

●      Workplace Harassment:
If an employee is subjected to harassment, mistreatment, or any form of abuse by at the workplace. They can terminate their contract without notice. It's essential that the harassment is reported to the competent authorities or MoHRE. It is reported within five working days of being able to report the incident.

●      Unauthorized Changes in Work:
If the employer instructs the employee to perform work that is different from the work. It is agreed upon in the employment contract about the work. But in case of a change of work and the employee has not given written consent for this change. The employee can terminate the contract without notice. However, certain exceptions may apply when the change in work is absolutely required.

●      Failure to Address Safety and Health Concerns:
An employee terminates the contract without notice if the employer fails to address factors. The factors include those that pose a grave danger or threaten the safety and health of workers. Despite being aware of these risks. These circumstances are outlined in Article 26 of Cabinet Resolution No. 1 of 2022.

It's crucial for employees to consider terminating their contracts without notice. It is necessary to follow the proper legal procedures to protect their rights. This includes notifying MoHRE and relevant authorities. The contract termination reasons and ensuring compliance with the law.

Additionally, if an employee decides to terminate their contract without notice. They should be aware of the potential consequences and legal responsibilities. The consequences associated with this decision. It is required to consult with legal experts or labor authorities. They can provide further guidance on the process. Also, it ensure that the termination is in line with UAE labor regulations.

Arbitrary Dismissal:

An arbitrary dismissal refers to the unlawful termination of an employee's contract. Arbitrary dismissal occurs when an employer dismisses an employee without a legitimate reason. It also include violation of the employee's rights as protected by the UAE Labor Law. If an employer terminates an employee for filing a complaint with the MOHRE (MoHRE). Or initiating a lawsuit that proves valid, is considered an illegal dismissal. Employees who believe they are dismissed arbitrarily can file a complaint with MoHRE. It may lead to compensation ordered by the court. Here are key points to understand about arbitrary dismissal:

●      Definition:
Arbitrary dismissal is the termination of an employee's contract by the employer. In a manner that is not in compliance with the UAE Labor Law. It involves dismissing an employee without providing a valid cause.

●      Legitimate Complaints and Lawsuits:
Arbitrary dismissal occurs on an employee termination on filing a complaint with MOHRE. Or initiated a lawsuit against the employer. It also arises if the validity of their complaint or lawsuit is subsequently proven.

●      Legal Consequences:
If an employee believes that they have been arbitrarily dismissed. Then they have the right to take legal action to challenge the dismissal. The UAE Labor Law provides a framework for addressing arbitrary dismissals. Also, it ensures that the rights of the employee are protected.

●      Complaint to MoHRE:
When an employee believes they have been dismissed arbitrarily. they can file a complaint with MoHRE. MoHRE will attempt to resolve the issue and ensure that the employee's rights are upheld.

●      Court Involvement:

●      If an amicable settlement is not reached through MoHRE'. The case may be referred to the respective court. The court will conduct an examination and assessment of the arbitrary dismissal claim.

●      Compensation:

●      If the court determines that the employee's dismissal was indeed arbitrary. Or violated the UAE Labor Law, which will order the employer to pay compensation to the employee. The amount of compensation is based on various factors. It includes the work type, the extent of damage, and the duration of the employee's employment. This compensation must not exceed the employee's wage for a period of three months. The calculation is based on the last wage they were entitled to.

●      Additional Rights:
The employee can also claim other rights, such as their gratuity, notice period dues, or any. The unpaid dues that they are entitled to under the employment contract.

Arbitrary dismissal is a serious violation of an employee's rights. The UAE Labor Law provides clear provisions to address this issue. Employees who believe they have been arbitrarily dismissed should seek legal guidance. They can file complaints with the appropriate authorities to address the situation.

Contract Termination: Changing job

After the employment contract termination in the UAE. The employees have the opportunity to change jobs or work for another employer. It is subject to specific conditions outlined in the UAE Labor Law. Here are the key points to consider when changing jobs after the termination of a contract:

1. Termination or Expiry of Previous Contract:

To be eligible for changing jobs, the previous employment contract must have terminated. This can occur for various reasons. It includes contract term completion, mutual agreement, or any other legal grounds.

2. Termination of Contract Without Notice:

Employees can change jobs after the termination of their contract without notice. But certain conditions must be met. One of these conditions is the contract termination without notice by the employer. This occurs when the employer breaches the employment contract or violates labor laws.

3. Grace Period for Transition:

Following the termination or expiry of the previous contract. The employees are provided with a grace period. During the grace period, they can obtain a new work permit. Or a residency for a different job or choose to leave the country. The specific duration of this grace period may vary. It is important to be aware of the applicable timelines.

4. New Work Permit and Residency:

If an employee intends to work for a new employer in the UAE, they must secure a new work permit and residency. This involves applying for the necessary legal documentation.

5. Compliance with UAE Labor Laws:

Changing jobs or working for a new employer must be carried out in compliance with UAE Labor Laws. It's essential that the employment change adheres to the legal requirements and regulations.

6. No Work Permit for One Year:

●      Article 8 of the Ministerial Resolution No. 47 of 2022 Regarding the Settlement of Labor Disputes and Complaints Procedures. An employee may not obtain a work permit for 1 year from the departure date under certain conditions:

○      If the employee terminated their employment contract during their probation period. It is provided that the employer did not breach their contractual obligations.

○      If a "work abandonment" report against the employee is found to be true.

7. Legal Procedures and Notifications:

Employees considering changing jobs should be aware of the:

●      Legal procedures

●      Notifications, and

●      Documentation is required for the transition.

It's advisable to consult with legal experts or relevant government authorities. It is necessary is to ensure a smooth and compliant transition.

Changing jobs in the UAE after the contract termination involves specific legal procedures. Employees should seek guidance from the MOHRE to navigate the process.

Conclusion:

Understanding the rules governing employment contract termination in the UAE is essential. It is necessary for both employers and employees. It ensures a fair and lawful process for ending employment relationships. It addresses arbitrary dismissals, thereby protecting the rights of all parties involved. For further guidance on labor procedures, individuals can refer to the MoHRE.

FAQs about Employment Contract Termination and Arbitrary Dismissal in the UAE

1. When can an employment contract be terminated without notice in the UAE?

Employment contracts in the UAE can be terminated without notice in specific cases. When an employee adopts a false identity, substantial material loss, violates safety instructions. It also includes failure to perform their basic duties despite warnings.

2. What is a "legitimate reason" for termination under the UAE Labor Law?

A legitimate reason for termination in the UAE involves a justifiable cause. It includes employment agreement violations. And those including those mentioned in Article 44 and Article 45 of the UAE Labor Law.

3. Can employees terminate their contracts without notice in the UAE?

Employees in the UAE can terminate their contracts without notice in specific situations. When the employer fails to meet obligations, harasses workers, assigns different work, or neglects safety.

4. What is arbitrary dismissal, and how is it addressed in the UAE?

Arbitrary dismissal occurs when an employer terminates an employee for filing a complaint. Or initiating a lawsuit that proves valid. In such cases, the dismissal is considered illegal. Employees can file a complaint with MoHRE. It may lead to compensation ordered by the court.

5. What is the notice period for termination in the UAE?

The notice period for termination in the UAE varies between 30 and 90 days. It depends on the specific circumstances and the party initiating the termination. It is designed to allow both parties for the end of the employment relationship.

6. Are there any penalties for illegal dismissals in the UAE?

If an employee is dismissed arbitrarily or without following the legal procedures. The employer may be required to pay compensation to the employee. The court assesses the compensation, which cannot exceed the employee's wage. The employee wages for the period of three months.

7. What happens if I want to change jobs after my contract ends in the UAE?

After an employment contract ends in the UAE, employees may work for another employer. Given that, certain conditions should be met. There is a grace period provided for this transition. However, it's essential to ensure compliance with UAE labor laws during this process.

8. Where can I seek guidance on labor disputes and legal procedures in the UAE?

For assistance with labor disputes related to employment contract termination in the UAE. The individuals can refer to the MOHRE or related authorities. These authorities can provide information and services regarding employment-related matters.