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Everything You Need To Know About Employment Termination Everything You Need To Know About Employment Termination

Bronze medal Reporter Ahmed Fakher Posted 13 Sep 2020
Everything You Need To Know About Employment Termination

Most employment relationships end by virtue of a notification served by the employer to the employee, indicating employer's unwillingness to renew the employment contract or intention to terminate their employment. However, most employees do not recognize whether the letter or notice of employment termination has been made in accordance with the provisions of the Labor Law or has been arbitrarily issued, for which compensation is due.

To simply start, we will review many different cases from the real labor market, for which we have filed many lawsuits. These cases, which are deemed to be wrongful termination as per the applicable UAE Federal Law No. 8 of 1985, include without limitation, the following:

  • the employer may notify you of terminating your service by virtue of a letter that does not indicate the reason for termination,
  • the reason for termination may not be work-related; your employer or boss may have personal reasons or motives,
  • denying access to the workplace and proceeding work; preventing you from entering your workplace to carry out the duties assumed in accordance with the employment contract, even by refusing to issue or renew the access card or receive the tools necessary to run your work such as your desktop computer,
  • downgrading or denying privileges, in order to underestimate and diminish your prestige; such as replacing your luxurious office that is served by a secretary with a small-sized office or partition,
  • problems between you and your line manager who lurks you around every corner by way of persecution and making unreasonable problems for which the termination letter has been issued,
  • terminating your service due to the gross mistakes you made, which have not been reported to the Ministry of Labor within 48 hours since the employer or company director was aware of them, while there was no written investigation carried out with you and you were not warned to be dismissed in case of repeating such mistakes,
  • sending you a letter of termination, indicating that your poor performance, lack of sales, or failure to achieve the quarterly or monthly target is the reason for such termination, without conducting investigation or informing you of the same; this may be contrary to the true state of affairs or may be due to market recession, which applies in return to all colleagues at the same branch,
  • the employer/company director claims that the reason for termination is attributed to restructuring the company, entirely closing your unit, or cancelling your job title due to the company's failure to achieve profits or because of sustaining losses; in this case, the employer is required to submit a budget approved by an account auditor, something which all employers fall short of, since the termination was originally contrary to the real financial position of the company,

  • the employer claims that the economic conditions and lack of work needs urged them to reduce the number of workers and terminate your service, contrary to the real financial position of the company,
  • in case you submitted your resignation and the company accepted it but you continued to work after expiration of the resignation prior notice, then the company terminated your employment on the basis of such resignation without informing you of the termination and its reason,
  • if your employment is terminated during the initial period, while your employment contract does not provide for the probationary period,
  • the employer may force you to submit resignation, which is deemed to be a wrongful dismissal requiring compensation; this may take several forms, including without limitation:
  • renewing your contract with benefits less than those previously granted in the initial contract,
  • failure of the employer to meet their contractual obligations, such as non-payment or irregular or delayed payment of your monthly salary, or failure to provide accommodation assumed in accordance with the employment contract, to afford transportation or travel allowances or to award the bonus agreed upon,
  • delaying your annual leave entitlements,
  • laying down difficult conditions that render the work under the employer's control hard and impossible.

Compensation for wrongful termination

Compensation varies in case conditions of wrongful dismissal are fulfilled. To determine the amount of compensation, it is necessary to specify the type of your employment contract, whether fixed-term or non-fixed-term contract.

Non-fixed-term contract:

If your employment has been wrongfully terminated and your contract term is not fixed, you shall be entitled to one-month to three-month compensation based on your most recent salary. The period for which compensation is due shall be determined according to the circumstances and factors of termination in the Court's discretion.

Example:

(A) works with (B) under a non-fixed-term contract for a total salary of AED 10,000 (AED 5,000 basic salary + AED 3,000 accommodation allowance + AED 2,000 transportation allowance). (A)'s employment has been wrongfully terminated and a three-month compensation has been designated for such dismissal. Then, the total compensation for wrongful termination shall be calculated as follows:

(Three-month compensation × AED 10,000) = (3 × AED 10,000) = (AED 30,000) (thirty thousand dirhams)

Fixed-term contract:

Calculating compensation in fixed-term contracts poses no difficulty. It shall be calculated on the basis of the remaining contract term, up to a maximum of three-month salary or the salary receivable for the remaining contract term.

Example:

(A) worked with (B) under a one-year fixed-term contract started on 1/1/2016 and ended on 1/1/2017 for a total salary of AED 10,000 (AED 5,000 basic salary + AED 3,000 accommodation allowance + AED 2,000 transportation allowance). (A)'s employment has been wrongfully terminated on 1/8/2016. The remaining contract term was (4) months and the compensation (A) was entitled to in this case was the maximum of 3-month salary. Then, the total compensation for wrongful termination shall be calculated as follows:

(Three-month compensation × AED 10,000) = (3 × AED 10,000) = (AED 30,000) (thirty thousand dirhams)

In conclusion, we emphasize that wrongful termination cases are vast and diverse due to the fact that the nature and circumstances of work varies from one workplace to another. All cases are deemed original despite similarity, and we believe to have presented most of them in this article. For further information and legal inquiries that may arise regarding wrongful termination, contact us via the e-mail address provided below.

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