Disciplinary Action and Arbitrary Dismissal in the UAE

- Written by Mandeep Kalsi, Senior Associate at Al Tamimi & Co.

The starting point in the UAE, as with other countries, is that where an employer wishes to dismiss an individual, either this should be:

• summary dismissal, without notice (which is when an employee is guilty of gross misconduct, for one of ten specified reasons set out in the UAE Labour Law) for those employed under fixed-term or indefinite-term contracts; or

• by notice for a “valid reason”, on notice, for those employed under indefinite-term contracts.

Due process

The UAE Labour sets out a basic minimum framework of rules and regulations regarding the manner and circumstances under which an employee may be subjected to disciplinary action (including dismissal). Under the Law, it is possible to dismiss someone as part of a disciplinary process, however, before any disciplinary penalty is taken:

• The employer must notify the employee of the charge against him;

• The employee must be given the opportunity to have his statement in defence heard; and

• The employer must investigate the defence.

If the contract or employment handbook provides a disciplinary procedure, this should be checked and followed if it goes beyond the provisions listed above.

Time frame

An employer must initiate disciplinary procedure within 30 calendar days of discovering the misconduct. Any disciplinary sanction must be determined within 60 calendar days of the investigation being concluded.

Arbitrary Dismissal

While UAE Labour Law does not define “valid reason”, termination of an indefinite-term contract may be deemed arbitrary if the reason for termination was “irrelevant to the work”. This has generally been accepted to a mean a reason connected to the employee’s performance (provided the employer is able to produce documented evidence of poor performance and also demonstrate that a disciplinary procedure has been followed).

Dismissal for gross misconduct is limited by the UAE Labour Law to ten exhaustive reasons (see Article 120). These include, by way of example, where an employee fails in their basic duties, or discloses confidential information of the employer. If an employee is summarily dismissed for gross misconduct, they would not be entitled to any notice or gratuity payment and their contractual entitlements would end immediately on the day that they are dismissed. Subject to the nature of the misconduct, employers may be required to notify the applicable governmental authority (which varies depending on the type of offence committed) or file a police complaint and await a final judgment against the employee, before confirming any dismissal.

How an employee is dismissed will therefore determine what payments they are entitled to receive, and what additional payments they may seek to claim.

It is worth bearing in mind that the dismissal of a UAE national employee is regulated by additional rules of the Ministry of Labour, and requires the employer to comply with certain notification requirements and obtain the consent of the Ministry of Labour.

Ultimately any disciplinary sanction taken should always be justifiable, be supported by written evidence, be subject to a reasonable disciplinary procedure and considered in light of the particular circumstances of the case and the requirements.