UAE – Arbitrary Dismissal/Termination & Compensation

An employee may only be dismissed in the safest and most appropriate circumstances. There is a difference between lawful and unjust dismissals, as well as sensible and unlawful dismissals. Unjust/Unlawful firing from your employer or requiring an individual to quit their employment without offering any reasonable cause are examples of unjust/unlawful dismissals. In the UAE, if a worker’s contract is terminated unfairly without a proper warning or forced to resign, he will be compensated as well as all of his dues, and he will be eligible for an employment experience certificate under UAE Law.If you believe that your employer has fired you without a valid cause in accordance with UAE Labour Law, Article 123, and if it is shown that an arbitrary termination occurred, the honorable court will order the employer to pay compensation.

 TLC’s legal team can help you get your due under UAE Labour law. We analyze your motion and offer suggestions for how to continue moving forward to secure your rights under UAE Labour law. Regardless of whether your contract is unlimited or limited, if a laborer feels he or she has been unjustly dismissed or that his/her employer has violated the articles, we can assist you in further litigation regarding this issue.

What Should You Do?

The employee may call and report a problem to (MOHRE), The Ministry of Human Resource and Emiratisation, at 80060, who examines complaints and attempts to mediate between the employer and employee in the first instance.

We assist the employee in registering his complaint with MOHRE and providing the exact calculation of his company’s overall payments to MOHRE. If the effort to compromise fails, and if resolution between the parties, particularly an employee and employer, cannot be achieved, The MOHRE refers the case to a competent court.

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Termination of Employment Contracts - Limited & Unlimited

with the legal procedure. After considering all the facts and thus the applicable legislation if it’s proven that the worker has been arbitrarily dismissed, the court will order the employer to pay proper compensation to the worker. The compensation will be determined by the length of service and the manner of termination.

Termination of Limited Employment Contract

According to the law, the employee may be terminated by the employer only after the end of the contract. Only and exclusively at the occurrence of any such events that are specified in article 120 of the utilization/employment legislation may the early or premature termination of a limited contract be allowed.

If the contract is terminated other than as a result of personal or labor law, the employer will be considered to have dismissed the employee arbitrarily or unfairly, which means he will be responsible for paying compensation equivalent to three months’ salary or the remaining duration of the contract, whichever is shorter. The employment law has established certain rules for termination that the employer must adhere to.

Termination of Unlimited Employment Contract

The employer is permitted to fire an unlimited contract without giving a reason after providing the required notice, and the employee has several alternatives as well. However, there is still some uncertainty when it comes to the termination of an unlimited labor contract, especially among businesses.

1.      An unlimited contract may be ended by any of the parties at any time for a reasonable cause, provided that notice is given to the other party prior to 30 days.

2.     The notice period must be as stated here below for employees who are paid on a daily basis.

A) If the employee worked for less than a year, but more than six months, the notice period is one week.

B) If the employee has been with the company for more than a year, he or she is entitled to two weeks’ notice.

C) If the employee has worked for at least five years, the notice period is one month.

After we read the article thoroughly, we’ll determine that an employer’s right to end an unlimited contract only for a good cause is ludicrous. As far as the end of unlimited contact is concerned, Article 113 section 3 states that this contract can be terminated only by one of the parties if the reason for termination is acceptable and notice has been given on time.

Then the question is, 1, what must be a reasonable cause for concluding an unlimited contact? 2, what must be the concept for recognizing such a legitimate reason? 3, who is that legal authority to decide whether or not the termination rationale is valid?

Article 122 of the Labour Law provides the following:

  • “An employee is considered to have been arbitrarily dismissed by his employer, if the cause for the dismissal is irrelevant to the work, and more specifically, if the reason is that the worker has submitted a significant complaint to the competent authorities or has instituted legal proceedings against the employer that have proven to be valid”.
  • From the above mentioned, there is no doubt that the right of termination of an unlimited contract under the Labour Law isn’t an unfettered right and is subject to the requirement that an employer demonstrates the existence of a legitimate reason for such a termination.


When it comes to the termination of an unlimited contract, especially among businesses, there is often a lot of confusion. There is a slew of employment myths that are frequently used to the disadvantage of both employers and employees. One of these myths is that an employer is tolerant to terminate a limitless employment contract after providing the appropriate notice, with no justification.

This myth actually roots from the wrong interpretation of Article 117 of the Labour Law, which reads as follows:

1- Both the employer and employee may terminate an unlimited contract for a just cause at any time in its term after it has been assumed by providing the other party with written notice in less than 30 days prior to the termination.

2- For a worker who works on a regular basis, the time of notice must be as follows:

a) one week notice if the workman has been working beyond six months but below one year;

b) two weeks’ notice, if the workman has been working not lesser than one year;

c) one month notice, if the worker has been working not lesser than five years.”

A careful reading of the aforementioned Article reveals that an employer’s right to terminate an unlimited-term contract is not absolute, but rather dependent on the presence of a “legitimate reason. The legal grounds for terminating the contract under Article 113, section 3 is: “if the provisions of the law regarding notice and legitimate reasons for termination are followed.”

Following that, the inquiry will determine what is considered to be a legitimate cause for canceling an unlimited contract, as well as the criteria for determining whether or not such real reason exists. Who has the power to decide if the reason for cancellation is valid or not?

It is already established that employers may terminate employment contracts (whether limited or unlimited) with immediate effect for reasons indicated in article 120 of the Labour Law. In addition to these circumstances, the Labour Law states that an appropriate cause for terminating a continuous contact should be one that is “work-related.” Article 122 of the Labour Law says: The following are examples of legitimate reasons for terminating an unlimited contract:

“A worker’s service shall be presumed to have been unlawfully/arbitrarily terminated by his employer if the reason for the termination is unrelated to his job and, more particularly, if the rationale is that he has made a serious allegation/complaint against his employer which has subsequently proved to be true.”

It is clear from the preceding that an unlimited contract’s right to terminate without cause under the Labour Law isn’t a free right, and it is dependent on an employer demonstrating a genuine reason for such a termination.