UAE Redundancy Law


Redundancy in UAE law means that a worker has been made excess for the requirements of his post under the employer’s business operations, and such redundant worker is sacked from the job. Redundant employees may legally challenge such dismissals by filing an arbitrary dismissal claim (if he or she was terminated without notice). The challenge is legally viable by filing it with the concerned labour department. It can also challenge such dismissals at the Court of First Instance, which may result in their reinstatement, redundancy payment (one month’s salary for each year), and full-time notice payment.

Minimizing Excess Workers

Any employer who and/or respective entity is required to obey this law and its principles. Employers can legally dismiss any worker that has been made excess for the requirements of the business, while at the same time ensuring that redundancy dismissal complies with legal provisions found out in such scenario (countrywide).

Role of Ministerial Resolution No. 279 of 2020

Such resolution was initiated, in an effort to strengthen the private sector employers within the wake of COVID-19 response. This resolution regulates a number of issues related to redundancy dismissals, which include:

– Payment of compensation for any worker who has been made redundant from his work and/or employment. The payment shall be equal to one-month gross salary for each year of service, provided that it should not be less than the worker’s last wage.

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– Requirement that any employer shall present an overall plan to regulate its policy regarding redundancy dismissals. The plan shall include the number of redundancies to be made in a certain period, procedures adopted by the employer, duration of implementation, implementation schedule, etc.

– Requirements for the form of notice to be given by employers who have made redundancies. This shall include information about an employer’s plans to reduce work capacity and the number of employees that are likely to lose their job. It should also indicate how long it will take for this policy to be implemented, as well as the criteria for selecting employees who are likely to lose their jobs.

– A number of rules are set out in terms of the requirement that employers need to give notice before terminating any worker’s contract or service relationship. This notice applies to both regular and temporary contracts, with a minimum period of one month according to UAE Labour Law and its regulations.


The employer is legally required to abide by the legal provisions found out to supply employees with certain rights under such circumstances of redundancy dismissals. These include the right to adequate notice (which is typically 30 days), notice payment (if the worker has accomplished his probation), and therefore the right for the end of service gratuity (presuming one year of service has been attained).

Furthermore, the UAE Labor Law states that a labour contract termination is arbitrary unless it is for a valid reason (for example, misconduct or poor performance), or any of the other explanations listed in Article 120. When an employer fires or pressures a worker to quit without giving a reason, it is termed arbitrary or unlawful termination. In accordance with UAE Labor Law Article 122, an employee may be terminated without cause if he or she is dismissed for reasons unrelated to work performance, or when a real complaint is filed against an employer and this made him malevolently discharge the latter. According to Article 123 of the UAE Labor Law, if an employee’s arbitrary termination is confirmed, the court will order the employer to pay compensation. The court will evaluate the value of compensation, which it will do based on the employee’s type of work, the amount of damage caused to the workman, and the length of employment. In all situations, the amount of compensation must not exceed the worker’s previous wage for three months, calculated on the basis on his or her most recent pay.

Article 115 of the UAE Labor Law states that if an employer arbitrarily terminates an employee for any reason other than those specified in Article 120, the Labor Agreement is entitled to pay a period of current wage or three months’ salary. The employer must pay that amount to the employee whatsoever the amount is lesser in comparison. In conclusion, if a person has worked continually for at least two years for a firm and was let go because of redundancy, he or she is entitled to 3 months’ pay in compensation. One of the most important questions for a business seeking to reduce expenses is how much does it cost to create an employee redundantly. When an employee is let go, the employer is obligated to pay or give the employee according to the specific conditions outlined in the employment contract with him.

One of the most important concerns for a business that needs to cut expenses is how much does it cost to set up an employee redundancy? When an employee is let go, the employer is legally required to pay or give compensation in accordance with the specific conditions specified in his employment contract.

The UAE Labor Law provides an employee with the following rights if he or she is fired:
  • The legal concept of constructive discharge is the obligation on an employer to provide notice or compensation in place of notice. The UAE Labor Law requires employers to give workers at least 30 days advance notice, which can’t be waived even with their consent.
  • The worker must be paid for all accrued/accumulated benefits (such as accrued and accumulated vacation) that have not been used.
  • If a worker has not been a member of an employer-sponsored pension plan, or if at the conclusion of service (or gratuity) payments should be made.
  • If the employee does not find alternative employment in the UAE within a specified time period, the employer is likewise obligated to repatriate him to his country of origin.

While the payments described above are correct entitlements, a typical question from employers is whether there is any promise to compensate for redundancy, as it exists in many countries all over the world. Since the UAE Labor Law does not include a provision for redundancy, there is no provision for compensation in the event of redundancy. Furthermore, the UAE Labor Law specifies that when an employer decides to terminate an employee for any reason other than one provided in Article 120, or one of the reasons set out under Article 120, the employer will be responsible to pay compensation. The maximum compensation is three months’ pay, as well as any other contractual or legal obligations.

As a result, it is conceivable that ordering a redundancy may place an employment obligation on the employer to pay the employee for lost earnings.  The UAE labor courts, however, have recognized an employer’s right to restructure its operations and have argued that redundancy is a reasonable non-arbitrary cause for dismissal.

As the UAE legal system does not follow a precedent-based approach, it is important to set up a limited consultation process that guarantees that any decision to make any particular employee or group of the unemployed can be justified and fair. If you are dissatisfied with your employer’s decision to terminate your employment, you have the right to seek further legal action. If you’re upset with your employer because he or she didn’t follow through on a promise made in writing or if another employee was mistreated, for example, you have the right to protest.

A worker’s notice period should be at least as long as the anticipated duration of his or her retirement. This will include ensuring that a staff member is given an appropriate notice period, and you are consulted with company executives regarding redundancy. If the employer fails to follow these required procedures, the employee has a discrimination claim or seeks compensation.

The situation is now sadly filled with accounts of businesses taking into account job losses as a result of the coronavirus epidemic. The harsh reality is that corporations from all industries are facing the consequences of coronavirus, and despite the government’s efforts to aid, the effect on employment seems unavoidable. When redundancies are necessitated, employers are held to a slew of new responsibilities, including the duty to talk with employees and pay compensation to those who are entitled.