UAE employee can file a case if arbitrarily made redundant

I am employed by a multinational organisation but I have been outsourced to a local company on an unlimited contract. I am soon to be made redundant and they are offering me only one month’s salary as a redundancy payment. I understood that the company should offer three months’ salary. I have also heard they […]

I am employed by a multinational organisation but I have been outsourced to a local company on an unlimited contract. I am soon to be made redundant and they are offering me only one month’s salary as a redundancy payment. I understood that the company should offer three months’ salary. I have also heard they are getting a new employee to replace me, so am I able to take any legal action against the company? IK, Dubai

UAE Labour Law, article 117 states that an employee is entitled to received notice of “30 days at least prior to termination” and a longer period is required only if this is stated in the contract of employment. If the redundancy is not for reasons of incompetence or without other good reason, an employee may be able to seek compensation for unfair dismissal. Article 122 states, “the termination by the employer of an employee’s service is considered arbitrary if the cause for such termination has nothing to do with the work”. And Article 123 goes on to say, “If the employee has been arbitrarily dismissed, the competent court has the jurisdiction to give judgement against the employer for payment of compensation to the employee. The court shall determine the amount of this compensation, taking into consideration the nature of work sustained by the employee, period of service and after investigation of dismissal circumstances. Provided that in all cases the amount of compensation should not exceed the employee’s pay for a period of three months, to be worked out on the basis of last pay due to him”. A case should be lodged with the Ministry of Labour in the first instant.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.

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