Ras Al Khaimah Court of Cassation, Labour Appeal No. 8 of 16 JY, judgment of 29 March 2021
When an employee stops working because the employer has not paid his wages, that is a form of arbitrary dismissal for which he may claim compensation under Articles 121 and 123 of the Labour Law. Where the employer gives a serious reason for dismissal, the employee bears the burden of proving it untrue. Whether the reasons for dismissal are genuine, whether the dismissal was arbitrary and the amount of compensation are for the trial court, provided its reasoning is sound.
The employee sued the appellant company in 2020 in the Ras Al Khaimah labour court for AED 2,380,784 in employment entitlements, including unpaid salary, with interest from the date of the claim. The courts below found that the company had delayed paying his salary, which led him to leave, and awarded compensation for arbitrary dismissal among other sums. An earlier round of cross-appeals in cassation (Nos. 10 and 11 of 2020) had been decided in January 2021. In this appeal the company challenged the finding of arbitrary dismissal. The Court of Cassation held that, under Articles 121 and 123 of the Labour Law, an employee's leaving work because the employer failed to pay his wage is one of the forms of arbitrary dismissal, entitling him to compensation, the amount of which is assessed by the trial court. Where the employer puts forward a serious reason for dismissal, it is for the employee to prove that the reason is false. The trial court has full power to weigh the evidence and documents and is not required to answer each argument separately, provided the truth it has found implicitly answers them. Assessing whether the grounds for dismissal were serious, whether the dismissal was arbitrary and what compensation is due falls within its discretion. The lower courts had relied on the established delay in paying the employee's salary, and their conclusion was reasonable and legally correct. The appeal was dismissed. The published volume gives the session date as 29 March 2020; as the appeal belongs to judicial year 16 (2021) and the reasons refer to rulings of January 2021, the year should read 2021.
Decided under the 1980 Labour Law, the ruling confirms that chronic late payment of salary is not just a debt claim: it can turn the employee's departure into an arbitrary dismissal with compensation on top of the unpaid wages. Employers in cash-flow difficulty face that additional exposure.
| Articles 121, 123 of Federal Law No. 8 of 1980 (Labour Relations Law) Decided under this law; it has been replaced by UAE Labour Law. |
“ترك العامل العمل بسبب عدم دفع رب العمل الأجر. صورة من صور الفصل التعسفي. مقتضاه. للعامل طلب التعويض عنه. المادتان 121: 123”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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