UAE Labour Law Legal advice

Dealing with the termination of an employment contract can be a difficult task. Whether you are a worker who wants to quit, or you are an employer having to fire some members of your staff. Luckily, Article 120 of the UAE Labour Law makes the path for contract termination very clear.

In this article, you will learn everything about Article 120 of the UAE Labour Law. Canceling contracts and dismissal are important concepts to keep in mind when running a business and working in one. Additionally, we will talk about employment and labor lawyers, their differences, and their importance for these procedures.

1. What does Article 120 of the UAE Labor Law states?

2. Which circumstances allow you to cancel a contract?

3. When can you terminate employment contracts without cause?

4. What is a termination notice period?

5. Fundamnetals of labour lawyers

6. What do employment lawyers do?

7. Differences between labor and employment lawyers

8. Why is it necessary to consult with a labor lawyer before terminating employees?

9. How can we help you understand the Labour Law better?

1. What does Article 120 of the UAE Labor Law states?

UAE Labour Law

Both workers and employers have specific rights under labour law. It includes every facet of employee and employer relationships. Article 120 of the UAE Labour Law, which deals with the termination of employment contracts by employers, is one of the most essential components of UAE labor legislation.

This article requires both businesses and people to abide by these rights. Article 120 of the Emirates Federal Labour Law N. 8 was revised in 1980. A company can suspend an employee without notice in the following situations, according to Article 120 of the UAE Labour Law.

  • They will be fired if they adopt a phony nationality/identity and submit forged certificates/documents.

1.1  Can an employer fire an employee right after their probation period?

A worker might lose the job while on probationary or after finishing the probation period. According to Article 120 of the UAE Labour Law, in case the worker’s error resulted in a significant substantial loss for the company, the employer might report the error to the Ministry of Labor.

Article 120 of the UAE Labour Law states that after becoming aware of the incidence, the obligation to inform the labor department is within 48 hours. If a worker exposes any of the company’s establishment secrets, he will also have to leave the employment.

When a worker disobeys instructions about workplace safety or industrial safety. The UAE labour regulation states that written instructions have to be displayed in a visible location at the workplace. In case the employee is illiterate, the employer will tell the rules orally.

When an employee fails to execute fundamental responsibilities outlined in the contract of employment and persists to do so Article 120 of the UAE Labour Law allows employers to fire them. A formal inquiry will be conducted, with a warning that such behavior may result in dismissal. They will be suspended if the offense continues despite warnings.

1.2 Offenses against honor and other important things

In addition to the termination following Article 120 of the UAE Labour Law, the employees will also be judged by a competent court for offenses against honor, public morality, and honesty, among other things.

  • When a worker is found to be inebriated or under the effect of illegal narcotics while on the job, he will be fired.
  • If the employee attacks the management, the employer, or any other coworkers while on duty, he may be suspended.
  • In case a worker is away from work for further than 20 days in a row or perhaps more than 7 days in a row, depending on the contract, without a good excuse.

1.3 Firing an employee without cause

Furthermore, according to Article 120 of the UAE Labour Law, it is legal to fire an employee without cause in any of the aforementioned scenarios. Even while these regulations may not apply to free zones, the vast majority of free zones do.

An employee can file a complaint with the Official Ministry of Human Resources and Emiratization if he feels he was fired unfairly. It will make every effort to resolve the problem amicably. If there is no amicable resolution, the case will be sent to the appropriate court.

2. Which circumstances allow you to cancel a contract?

According to Article 42 of the 2021 Federal Decree-Law N. 33 on the Regulation of the Private Sector in Labour Relations, often known as the UAE Labour Law, a contract of employment can end under the following circumstances:

  • When they do not extend or renew the contract after the contract’s term ends.
  • If both the employer and the employee agree to discontinue it in writing.
  • In case any party decides to terminate it, assuming that the resigning party respects the employment contract’s termination conditions and the notice time agreement.
  • When the contract’s topic is connected to the employer’s entity, the contract will be ended.
  • Based on a certificate by a medical organization, in the case of the worker’s death or total and permanent inability to work.
  • If the establishment closes permanently, a worker risks a final court judgment of a freedom-restricting sanction. For a term of not less than three months, in line with UAE regulation.
  • When the employer is bankrupt or incapable, or if any economic or unusual circumstances prevent the project from continuing.
  • In case the employee fails to meet the requirements for renewing the working visa for reasons beyond the employer’s control.

3. When can you terminate employment contracts without cause?

Any party can terminate an employment contract. However, this is as long as the notice period is followed and the other legal repercussions of the termination are met. That means that you can fire an employee, or quit a job, without a reasonable cause.

However, you need to inform the other party, and the agreement is still running for a certain period. This will make sure both parties have enough time to balance the loss. Just like Article 120 of the UAE Labour Law, terminating without a cause also has some regulations.

If an employer eliminates a worker because they submit a legitimate complaint to the MoHRE or issue a lawsuit against the employer, this is arbitrary dismissal. The UAE Labour Law is against any form of arbitrary dismissal.

3.1 What is a termination notice period?

Article 43 of the New UAE Labour Law states that either party to a contract of employment can terminate it for any ‘valid cause,’ as long as the other party receives written notice and the dismissing party serves a notification of one month (30 days) to three months (90 days).

3.1.1 Rules applying in the termination period:

When it comes to the termination period, the New UAE Labour Law has some rules to apply. During the notice period, the worker must continue performing the work set in the agreement. For the notice period, the employee is eligible for his entire contract salary.

The side who refuses to serve the period of notice must pay the other a ‘notice period’ allowance. Accordingly, this is equivalent to the worker’s wage for the whole notice period or prorated according to the remaining time. The amount depends on the worker’s most recent pay. As Article 120 of the UAE Labour Law states.

If the employer cancels the contract, the employee is eligible for one day of unpaid leave every week throughout notice to look for a new position. This is according to the UAE Labour Law.

4. When is it considered arbitrary dismissal?

Article 47 of UAE Labour Law states that if an employer fires an employee for submitting a complaint with MoHRE or pursuing legal action against the employer, the termination is unlawful. If an employee feels the employer is unlawful, he can file a complaint with the Ministry of Human Resources and Emiratization.

The MoHRE will check if the situation fits Article 120 of the UAE Labour Law. They can send the case to the appotiate court if they cannot reach an amicable resolution. In which case, you should try to count on a great lawyer.

When there is arbitrary dismissal, the court will require the employer to give the worker compensation. Just like in Article 120 of the UAE Labour Law. The court will determine the amount of compensation based on the nature of the work, the degree of the employee’s injury, and the length of his employment.

In the New UAE Labor Law, you can find the calulation of the leave and gratuity compensation. In all situations, the level of compensation shall not exceed the employee’s pay for three months, based on the assessment of the last payment to which he was eligible.

5. What are the fundamentals of labour lawyers?

UAE Labour Law

A labour lawyer in Dubai assists his or her clients in interpreting, advising, and litigating employment and labor-related legal matters. They are very knowledgeable in anything regarding Article 120 of the UAE Labour Law and the New UAE Labour Law overall.

A labour lawyer may represent both workers and employers, while some employment attorneys prefer to represent either employees or only employers. Labor attorneys are often barristers as well as solicitors. When searching for a lawyer, make sure you find the best representation in Dubai.

A barrister is a person who represents clients in court (like arguing in court). A solicitor is somebody who writes or evaluates paperwork (like making contracts). In both cases, the lawyers are very aware of all changes in the New UAE Labour Law, to make the case as successful as it can be.

Most labor lawyers practice a combination of litigation and drafting. This is unusual since many other types of lawyers only perform either one. A criminal lawyer, for example, usually just litigates. However, regardless of what they focus on, they must be familiar with Article 120 of the UAE Labour Law.

6. What do employment lawyers do?

Finding the best employment lawyers specializing in employment law can represent both employers and employees is ideal. They deal with customers in labor-unionized areas such as education and law enforcement.

These attorneys are knowledgeable in union laws and regulations, just like Article 120 of the UAE Labour Law. As well as how they relate to employers and unionists. Employment attorneys usually handle cases involving union formation, collective bargaining, and talks between unions and management.

To settle conflicts, these lawyers may file lawsuits or seek out-of-court agreements. In other circumstances, they may file a lawsuit against the opposite party.

7. What are the differences between labor and employment lawyers?

Employment lawyers and labor lawyers deal with comparable concerns, yet there are significant variations between the two categories of attorneys. Both are aware of Article 120 of the UAE Labour Law and apply their knowledge in their work but in a different way.

Non-unionized employees and employers are represented by employment attorneys in the UAE. They usually deal with federal and state laws concerning nonunion scheduling, overtime, unfair dismissal, discrimination, harassment, and employees’ compensation.

Labor lawyers, on the other hand, primarily focus on state and federal labor regulations that relate to both unionized workers and management. Like in Article 120 of the UAE Labour Law. Most labor attorneys base their claims and lawsuits on legislation such as the National Labor Relations Act.

8. Why is it necessary to consult with a labor lawyer before terminating employees?

In any case, it is an employer’s better interest to consult with a legal professional before terminating a unionized employee. Even if you suspect the employee has committed unlawful acts or stolen from the organization. You should always consult with an attorney before proceeding with a termination.

Labor regulations are complex, although Article 120 of the UAE Labour Law attempts to explain them as clearly as possible. However, few company owners get the time to learn about them. Labor attorneys are professionals in labor law and can examine your position and assist you on how to continue to protect you and your company.

9. How can we help you understand the Labour Law better?

Now that you know everything about Article 120, you are much safer when dealing with labor or employment situations. As you can tell, there are a lot of regulations one needs to pay attention to. Counting on a great lawyer will make the ultimate difference.

Here, on Connect Legal, we count on the best lawyers you could find in the UAE. Of course, apart from knowing everything about Article 120 in UAE’s Labour Law, there are other areas in which we can help you. Like helping you if you are thinking to buy or sell a property, or maybe saving your divorce case.

Would you want to contact Connect Legal to learn more about Article 120 in UAE’s Labour Law? Please email us at contact@connectlegal.ae if you have any doubts, and we will respond as quickly as possible. You may also reach us by cellphone at +971 43 316 688 to address your problems.

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Danielle

Danielle
Danielle is Head of Operations at Connect Resources. She also advises & manages the legal work of the company having studied Law at John Moore’s University in Liverpool, United Kingdom. Danielle oversees the processes of the company’s various departments and ensures an overall smooth interconnectedness and operation between each in order for the company to function at its highest potential.

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