If there are three words guaranteed to strike fear in the heart of a business owner in the UAE, it is, "unfair dismissal claim." While many executives see an unfair dismissal claim in the UAE as a minefield, this need not be stressful or catastrophic commercially for the business by taking some elementary precautions.
As with many legal challenges encountered in the United Arab Emirates, the best defence is always prevention. Ensuring the organization implements a reasonable and structured approach to its human resources practices, including its disciplinary procedure, unfair dismissal in the UAE need not be a pitfall for the business.
What To Do In the Event of An Unfair Dismissal Claim Against You?
In the event an unfair dismissal claim is lodged against your organization, there are four early actions every employer should take:
1. Immediately review the disciplinary process followed to ensure it complied with the provision of the UAE Labour Law.
2. Check all documentation relating to the employee in question.
3. Consider the reasons given for the employee's termination.
4. Consult MIO.
A fair and reasonable process, supported by sound documentation will go a long way to protect an employer against an unfair dismissal claim in the UAE.
Can I Prevent Unfair Dismissal Claims?
In many instances, unfair dismissal claims are avoidable, or their impact mitigated, by adopting three simple management strategies:
1. Comply strictly with the UAE Labour Law
2. Maintain impeccable employee documentation and record keeping
3. Implement a disciplined and fair disciplinary process and document its outcomes
Following these simple procedures will avoid many potential law suits and provides you with an excellent defence in the event you face an unfair dismissal claim.
While compliance with UAE Labour Law can be time-consuming and in some cases expensive, it inevitably proves to be time and money well spent, particularly when it contributes to a change in an employee's conduct, a lift in performance, or facilitates the lawful dismissal of an employee.
What Does the UAE Federal Law No.8 of 1980 as amended (UAE Labour Law) Cover?
The UAE Labour Law covers:
- Disciplinary action against an employee and
- Arbitrary dismissal.
How Do I Reduce My Exposure To An Unfair Dismissal Claim?
If you are facing an unfair dismissal claim, one of the foundations for your defence will be how compliant your disciplinary process is with Articles 102 and 110 of the Labour Law.
The UAE's legislative framework governing disciplinary processes are limited in scope and ambition but outline the management of an organization's disciplinary process. Article 102 of the UAE Labour Law, includes provisions for an employer to impose disciplinary penalties on its employees.
These penalties span:
- A warning
There are strict provisions attached to these penalties, and the courts have been consistent in applying them. Under Article 110 of the UAE Labour Law, an employer may not impose the penalties listed under Article 102 unless the employer can clearly demonstrate:
- The employee received written notification of the areas of concern.
- The employee had an opportunity to comment on the employer's concerns, and documentation of these are in writing.
- The employer reviewed the employee's defence or mitigating circumstances relating to the employer's concerns.
- Documentation of the disciplinary process and outcome are in the employee's personnel file.
Are There Time Limits To Taking Disciplinary Action?
UAE Labour Law imposes quite strict time limits within which disciplinary measures against an employee must occur. No Employee may be charged with a disciplinary offence after more than 30 days have elapsed since the offence was discovered nor may a disciplinary penalty be imposed more than 60 days after the date on which the inquiry into offence ended and the Employee's guilt was established.
Prevention Is The Best Defence
Ensuring the correct procedure is in place before initiating a disciplinary action is essential in protecting the employer should the employee file an unfair dismissal claim.
If an employer does not adequately comply with the statutory procedure laid out under UAE Labour Law, the Labour Courts could find the employer's disciplinary action to be unlawful, regardless of the employee's poor conduct or performance, leaving the business open to an unfair dismissal claim.
How Do I Defend Against Unfair Dismissal?
An employee in the UAE may file a claim for arbitrary dismissal under the UAE Labour Law after the termination of their employment. How successful the claim is, depends largely on the reason for termination and how compliant the disciplinary process implemented by the employer was with UAE Labour Law prior to terminating the employee; this places the onus on companies to implement a fair and transparent procedure and document the process from the beginning.
Under the provisions of an employment contract, an employer may terminate an employee, provided the employer:
- Gives the employee written notice of termination as set out in the employee's employment contract and abides by the terms and conditions of the contract.
- Follows the process outlined in the UAE Labour Law.
- Dismissal is for a "valid" reason.
While the UAE Labour Law does not define a "valid" reason, termination of an employee's employment will be arbitrary if the Labour Court finds the reason stated for the termination was "irrelevant to the work".
Review Your Company Practice Today
We recommend that to protect themselves from unfair dismissal claims, employers should review their current human resource practices and make changes where necessary to comply with UAE Labour Law. The company disciplinary policy, whether reflected in the employee's employment contract, the staff handbook or a stand-alone policy, should address the minimum requirements set out in the UAE Labour Law. The organization's disciplinary policy should be communicated clearly to all employees, preferably during a formal induction, be readily available to them, and serve as a template for any disciplinary process.
As is evident, it is critical for employers to follow a fair and reasonable process and that any disciplinary action is justified and supported by clear documentary evidence.
Ultimately any disciplinary action should always reflect the provisions of UAE Labour Law, be justifiable, well supported by written documentary evidence, and finally, be the outcome of a reasonable and fair disciplinary procedure.
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