If an employee is dismissed by a company on the mainland of the UAE without legal grounds, their employment relationship is governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, as well as Cabinet Resolution No. 1 of 2022 on its application.
An employer in the UAE has the right to terminate an employment contract for a valid reason, notifying the employee within the stipulated period mentioned in the contract. According to Article 43(1) of the Labour Law, either party may terminate the contract for a substantial reason by providing written notice. In this case, the employee must perform their duties during the agreed notice period, which must be no less than 30 days and no more than 90 days.
However, an employer cannot dismiss an employee without justifiable reasons. If the dismissal occurs without legal grounds, it may be considered arbitrary dismissal. This is stipulated in Article 47(1) of the Labour Law, which states that dismissal is arbitrary if the employee files a serious complaint with the Ministry or brings a valid lawsuit against the employer.
If the court determines that the dismissal was arbitrary, the employer may be obliged to pay the employee fair compensation. The competent court will determine the amount of this compensation based on the type of the employee's work, the damage caused, and the duration of their service, but the amount must not exceed three months' salaries calculated based on the employee's last salary. This is enshrined in Article 47(2) of the Labour Law.
It is important to note that this compensation is provided in addition to any payment in lieu of notice and end-of-service benefits due to the employee under the provisions of the Labour Law, as stated in Article 47(3).
Based on the aforementioned legal provisions, if an employee believes that their employer terminated the employment relationship without legal grounds, they can apply to the Ministry of Human Resources and Emiratisation (MOHRE) demanding compensation for arbitrary dismissal, as well as for other payments due to them at the end of service. After filing a complaint with MOHRE, this authority may attempt to settle the dispute between the employee and the employer amicably. If an amicable settlement is not reached before MOHRE's intervention, the employee has the right to file a labour lawsuit against their employer in a court with jurisdiction in the UAE.