Undoubtedly, the UAE has a clear labor law that outlines all procedures, steps, and details to prevent any problems. In this article, we have gathered for you the best information regarding compensation for termination of employment UAE, so that you have all the information you need in one place.
Wrongful Termination of Employment in UAE Law
The provisions regarding the rights of an employee in the event of termination of employment in the UAE are contained within Article 47 of the UAE Labour Law, issued by Federal Decree-Law No. 33 of 2021.
This article stipulates that any termination of an employee’s services by the employer is considered unlawful if such termination results from the employee submitting a labor complaint to Ministry of Human Resources & Emiratisation against the employer, or if the employee files a lawsuit against the employer in one of the labour courts, provided that the lawsuit is proven to be valid.
Thus, we observe that the UAE legislator in the Labour Law has conditioned the consideration of service termination as unlawful, i.e., an arbitrary termination of employment by the employer, on the existence of a serious complaint submitted by the employee to the Ministry of Human Resources and Emiratisation, or the initiation of a legal action against the employer in the labour court, provided that the validity of such a lawsuit is established.
However, returning to the provisions of other articles related to the termination of employment, we notice that arbitrary dismissal is more comprehensive than what Article 47 of the UAE Labour Law stipulates.
Cases where an employee leaves the job without notice, as mentioned in Article 45 of the same law, can be considered as instances of arbitrary dismissal.
At first glance, it may seem that the employee has left the job of their own volition, which is also considered a violation of the law when the employee leaves the job without notifying the employer.
However, a closer examination of the content of Article 45 of the UAE Labour Law reveals that the employee did not leave the job voluntarily. Furthermore, the same article grants the employee, despite leaving the job without notice, the right to receive all rights related to the termination of service.
Terminating the employment contract in a manner contrary to the provisions of Article 46 of the UAE Labour Law is considered arbitrary dismissal. This occurs when the employer terminates the employee’s service due to health unfitness before the employee has exhausted all entitled leaves according to the Labour Law.
Compensation for Termination of Employment UAE
1. Worker’s Wage
An employee who is unlawfully terminated is entitled to the remainder of their wages from the employer, including the basic salary, all compensations, and allowances attached to that salary, including overtime hours.
2. Compensation for Leave
An employee who is unlawfully terminated is entitled to monetary compensation for entitled but unused leave, calculated based on the number of working days spent in the year.
3. End of Service Notice Allowance
Entitled to a notice allowance that the employer is required to provide in writing to the employee before terminating the employment contract, even if the absence of notice does not harm the employee. The notice allowance is equal to the employee’s wage for the entire notice period or for the remaining part of it, calculated according to the last wage received by the employee.
4. End of Service Gratuity
Entitled to an end-of-service gratuity calculated based on a wage of 21 days for each of the first five years of service with the employer, and a wage of 30 days for each year beyond that period. The employee is entitled to the gratuity for parts of a year in proportion to the duration of employment, provided that the employee has completed one full year of continuous service with the employer.
5. Compensation for Termination of Employment
If the unfair dismissal is proven, the employee is entitled to compensation determined by the competent labor court. In assessing the compensation, the court must take into account the type of work performed by the employee, the extent of damage suffered by the employee due to the unfair dismissal, and the duration of service with the employer.
In all cases, compensation for termination of employment amount for should not exceed the employee’s wage for three months, calculated based on the last wage received by the employee.
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Frequently Asked Questions (FAQ)
Does Granting Compensation for Termination of Employment Deprive the Employee of the End-of-Service Gratuity?
Granting a compensation for termination of employment does not deprive the employee of the end-of-service gratuity or the notice allowance due in the termination of the employment contract. The law is explicit in granting the employee all rights according to the provisions of the third paragraph of Article 47 of the UAE Labour Law.
I’ve Filed a Complaint Against My Employer, and I’ve got terminated upon that; is this considered unfair dismissal?
If you filed a lawsuit against your employer and they terminated your employment, such dismissal is not considered unfair unless the validity of the lawsuit you filed against the employer is proven. If the lawsuit is found to be malicious, the termination of the employment contract by the employer will not be considered as unfair dismissal.
In conclusion of our article about Compensation for termination of employment UAE, we hope to have clearly explained the circumstances under which unfair dismissal occurs and the compensations awarded to the employee. We advise anyone who faces unfair dismissal in the UAE to seek the legal expertise of the best lawyers specialized in labor cases.
If you need legal advice regarding compensation for termination of employment UAE , do not hesitate to contact us.