Question

Question 02: Analyze and evaluate the employement dispute resolution procedures according to UAE labour law.(200 words)

Question 03: Discuss the Arbitrary termination or arbitrary dismissal compensation according to UAE labour law.(200 words)

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Answer 1

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Answer 1:

It is illegal in the UAE to work without a labor contract or a labor card. An employee cannot support a claim for benefits or file a complaint against his employer since there is no document signed by both parties with regard to the job agreed to be done by the employee.

Steps to be Taken When There is a Labour Dispute - There are simply a few steps that should be taken when there is a dispute that arises between two parties, the employer, and the employee.
According to Article 6 of the Labour Law, either the employee or employer can file a complaint to the concerned labor department, which will call both parties with regard to the dispute and try to settle for an agreement. If the settlement does not take place between the two parties, the aforementioned department shall refer the dispute to the Courts within two weeks from the submission of the application or complaint.

The UAE Labour Court has two circuits:

· The first one, which is referred to as the minor circuit that has only one judge to look over cases that are below one hundred thousand dirhams and counter cases as well, and this time, regardless of the amount.

· The major circuit is the second one that has three judges that are presided by one of them who takes care of cases with a value of more than one hundred thousand dirhams and counter cases as well regardless of their value.

Within three days of receiving the application from the concerned labor department, the court shall hold a session with regard to the consideration of the claim and notification shall reach the two parties. For further explanation regarding the application, the court may call for a representative from the abovementioned labor department. There will be no claim on the part of any party if the complaint is brought after a year from the date the entitlement became due. Moreover, there will be no admitted claim if the proper procedures are not followed.

Answer2:

Following the termination of employment, employees in the UAE may pursue claims for arbitrary dismissal under the UAE Labour Law, which is similar to the UK concept of unfair dismissal. Whether an employee will be successful with any such claim will ultimately depend on the reason for the termination and the process the employer undertook prior to terminating the employment. Therefore, it is essential for employers to follow the correct procedure from the outset.

An employer may terminate an employee working under an unlimited term contract at any time on written notice, provided the employer follows the process set out above, gives the employee the correct written notice of termination in accordance with the employment contract and the dismissal is for a “valid reason”. The notice period should be at least 30 calendar days. Although there is no definition of a “valid reason” in the UAE Labour Law, an employee’s employment will be deemed to have been arbitrarily terminated if the reason for the termination was “irrelevant to the work”.

In our experience, the Courts only accept a termination to be “valid” and thus decline to award arbitrary dismissal compensation, where either (i) the employee is guilty of one of the specified (and exhaustive) gross misconduct type reasons listed in Articles 88 and 120 of the UAE Labour Law, or (ii) the employee is a poor performer (and there is documentary evidence supporting the poor performance or misconduct).

The maximum compensation that can be awarded to an employee pursuant to an arbitrary dismissal claim is three months’ remuneration, calculated based on the last payment received by the employee prior to dismissal. For these purposes, “remuneration” is the employee’s full pay (basic salary plus any monthly allowances). In addition, where the employee receives regular or guaranteed bonus or commission payments, these may also be taken into account by the Court when determining the employee’s remuneration. The actual amount of the award, if any, is ultimately determined by the Court. Whilst the cap on compensation might be perceived from a costs-benefits ratio as fairly low-risk by some employers, what should not be overlooked or discounted is the inevitable management time and legal costs that will be incurred in defending a claim presented by an aggrieved employee.