Unfair Dismissal in the UAE

I am always surprised, as a lawyer, when people tell me that there is no such thing as unfair dismissal under UAE Employment law, or labour law as it is known in the UAE. The reason for my surprise is that there obviously is a concept of unfair dismissal in the UAE; it’s just the way we interpret the term ‘unfair dismissal’ that is amiss.

What exactly is an unfair dismissal?

In simple terms, any dismissal that is contrary to UAE Labour law is, by its very nature, an unfair dismissal. The right question to ask is not what is an unfair dismissal, but "what is a fair dismissal?".

What does the UAE Labour Law say?

Art 42 Law (33) 2021 states the grounds that an employment contract can be terminated and in part states when a termination is potentially fair, as opposed to unfair. Art 42 gives nine situations as to when an employment contract terminates, such as death of an employee or where an employee has been issued a freedom restricting penalty (namely confined to penal detention) for a period in excess of 3 months. By far the most common terminations under Art 42 are found in Art 42(1); written agreement of both parties and Art 43(3); based on the wish of either party, provided the provisions of Law (33) 2021, along with notice period provisions, are followed.

Accordingly, any termination which is not found under Art 42 or fails to follow the provisions found in Art 43/44 may not be a fair dismissal and may be unfair by default.

Further to this, Law (33) 2021 also provides for a special class of terminations, which are found under Arts 46 and 47.

Art 46 makes it illegal to terminate an employee due to poor health (sickness) before using the legally accrued leave. This does not mean that an employee cannot be terminated if they are on sick leave, as Art 31(5) provides that an employer may terminate the employee’s service if the employee is unable to return to work after exhausting all leave provisions, which in total amounts to 90 days. After 90 days, and assuming the provisions of Arts 41. 42, 43 and 46 are followed, a termination under Art 31(5) is potentially fair.

Art 47 is a unique provision under UAE Employment Law, insofar as it provides for a special class of termination, that of ‘illegitimate termination’. Art 47 is very narrow and very limited in scope and only applies where the employee is terminated for either presenting a claim to the Ministry or by presenting a lawsuit against the employer, which is validly proven. These are the only 2 grounds to support an illegitimate termination claim. What is of additional interest is that termination claims under Art 47 are the only claims under UAE Employment law that provides for additional compensation of up to 3 months of the employee’s salary.