Employment: UAE case law

A claim over an employer's failure to register a worker for pension is a labour dispute needing prior referral

A court must itself determine the correct legal characterisation of a claim from what is actually sought and the legal basis on which it rests, whatever kind of liability or provision the claimant invokes. A former employee's claim for sums arising from…

Compensation for unlawful dismissal is capped at three months' wage, but a longer contractual notice period binds the employer

Under Article 47(2) of Federal Decree-Law No. 33 of 2021, an employer must pay fair compensation, assessed by the court, where a dismissal is unlawful, taking into account the type of work, the harm suffered and the length of service, but never more than…

An employer's request to set off a loan against end-of-service gratuity must be made at first instance

A request that the court set off a sum the defendant claims from the plaintiff, such as an employer's demand to deduct a loan from the employee's end-of-service gratuity, is an incidental claim and not a defence on the merits, because judicial set-off…

An employer's admission that a bonus was promised on conditions cannot be split to enforce the promise alone

An admission, judicial or not, is a person's acknowledgment of a right against him that relieves the other party of proving it; it binds only if it establishes the right with certainty and the person making it understood and intended its effect. A…

An employer enforcing a non-compete clause must prove actual loss; a breach alone earns no compensation

Under Article 10 of the Labour Relations Law, an employee who breaches a post-employment undertaking not to compete is liable to compensate the employer for the resulting damage. The liability is contractual: breach of the undertaking is not enough, the…

A 'pension' paid with salary during employment cannot replace a free-zone employee's end-of-service gratuity

Under Article 51 of the Labour Relations Law (Federal Decree-Law No. 33 of 2021), a foreign full-time worker with at least one year of continuous service is entitled to an end-of-service gratuity when his service ends. Rights that arise only when the…

An employer's claim to recover a personal loan to an employee is not subject to the labour-law one-year bar

Laws do not apply retroactively; a legal relationship and its effects are governed by the law in force when they arose. Under Article 6 of the former Labour Relations Law (Federal Law No. 8 of 1980), which governed a cash advance made and fully due before…

An employer that stops a resigning employee from working her notice period must pay her notice wages

A worker is entitled to the agreed wage if he performs the work or makes himself available for it, even if no work is assigned (Article 912 of the Civil Transactions Law). Under Article 43 of the Labour Relations Law either party may end the contract for a…

An employee suspended during a criminal case and later acquitted recovers full wages; limitation waits for the verdict

Under Article 40(2) of the Labour Relations Law an employer may suspend a worker accused of certain offences, without pay, until a final decision; if the worker is not sent for trial, is acquitted for want of an offence, or the investigation is closed for…

Workers with labour claims of up to AED 100,000 pay no court fees or cassation deposit at any stage

Reading Articles 181(2) and 188 of the Civil Procedure Code with Article 9(1) of Dubai Law No. 21 of 2015 on Judicial Fees in the Dubai Courts, claims, appeals, cassation appeals and petitions for reconsideration brought by workers, or those entitled…

The two-year labour limitation period applies to unexpired claims, counted from the old start date for earlier periods

Federal Decree-Law No. 9 of 2024 replaced Article 54(9) of the Labour Law: claims are now barred two years after the employment relationship ends, instead of one year after each right fell due. Under Articles 6 and 7 of the Civil Transactions Law, the new…

Under the 2021 Labour Law, compensation for unlawful dismissal is limited to the two cases in Article 47

Article 47 of Federal Decree-Law No. 33 of 2021 confines compensation for unlawful dismissal to two cases: dismissal because the worker made a serious complaint to the Ministry, or because he filed a case against the employer that proved well founded.…

A worker injured through the employer's fault may sue in the civil court in tort, beyond the labour-law compensation

Compensation for work injuries under Article 37 of the Labour Relations Law and Cabinet Resolution No. 33 of 2022 is a statutory, no-fault entitlement based on risk, calculated by the law's tables and heard by the labour court. A claim alleging the…

A worker's waiver of statutory rights during employment is void, but a settlement made after resignation binds him

A release or acknowledgement by a worker giving up rights under the employment contract or the Labour Relations Law while the employment relationship continues is void, even with his consent, because those rights are matters of public order. A waiver or…

Contracting parties cannot sue each other in tort for breach, and departing from expert findings needs sound reasons

Where the injured party and the party responsible are linked by a prior contract, the claim for compensation cannot be based on tort, because that would override the contract's terms on liability and undermine its binding force, unless the harm results…

A worker paid out under an employer retirement savings plan cannot also claim statutory end-of-service gratuity

A worker may not combine benefits under a retirement, insurance or similar scheme with the statutory end-of-service gratuity; he may only choose the scheme that gives the larger amount. Where the employer has paid the contributions to the scheme, the…

A dismissal without the written investigation required by Article 44 leaves the employer liable for notice pay

An employer may dismiss a worker without notice under Article 44 of the Labour Relations Law only after a written investigation and, for repeated breach of duties, two warnings; without them the worker is owed notice pay, even where an outside body has…

A labour claim interrupts the one-year bar, and failing to notify the Ministry before dismissing an Emirati made the dismissal arbitrary

The time bar on hearing labour claims is subject to the Civil Transactions Law rules on suspension and interruption. A court claim or any judicial step taken by the creditor against the debtor interrupts it; the time already run is wiped out and a new…

Al Ain appellants get the ten-day distance period for cassation appeals; non-compete limited by place

The 60-day period for a cassation appeal (Article 176 of the former Civil Procedure Law) is extended by the ten-day distance period under Article 12 for an appellant whose domicile is outside the seat of the Abu Dhabi Court of Appeal, such as Al Ain, even…

Covid-era pay cuts accepted by the employee bind him, and RAK courts must follow RAK cassation precedent on interest

Wage includes only amounts that are fixed and regular; payments due only when their cause arises are not wage unless the law says otherwise. An employment contract is consensual, so the parties may agree to reduce pay, and the employee's acceptance may be…

An employee who leaves because his salary is not paid is treated as arbitrarily dismissed

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…

Dismissal to cut costs or reorganise is not arbitrary; leave pay after termination is on basic salary

An employer may organise its business as it sees fit, including narrowing its activity or cutting costs to protect its legitimate interests, and terminating some employees for that purpose is not arbitrary dismissal; the employee alleging arbitrariness…

A DIFC Courts clause does not oust RAK courts over a RAK free-zone company not registered in the DIFC

The DIFC Courts' jurisdiction depends on the conditions in the DIFC judicial authority law. A company that is not registered in the DIFC is not one of its bodies or establishments; if its management is in Ras Al Khaimah and it belongs to the RAK Free Zone,…

A court cannot label a worker a partner and the licence holder a mere sponsor while ignoring contrary evidence

An employment contract is identified by subordination and wage, which distinguish a worker from a partner. A written contract can as a rule be shown to be sham only by writing, but where the sham conceals a fraud on the law it may be proved by any means.…

A worker's service continues when the business changes hands, and a waiver of statutory rights is void

A worker's service with the same employer or its legal successor is treated as continuous, whatever change occurs in the form or legal status of the establishment. When ownership of an establishment passes to a new owner, the employment contract continues…

UAE courts hear a free-zone employee's claim against a foreign employer where the contract was performed in RAK

UAE courts have jurisdiction over a claim against a foreign defendant with no domicile or residence in the UAE where the dispute concerns an obligation performed in the UAE, and any agreement to the contrary is void. An employment contract performed at the…

RAK Free Zone Authority staff rules fill gaps in its employment contracts, including probation

The Ras Al Khaimah Free Zone Authority may lay down the rules needed to run and organise the Free Zone, its companies and its staff. A person employed by the Authority stands in a regulatory relationship with it: the employment contract governs where it…

The RAK Free Zone arbitration scheme does not take away the courts' jurisdiction over free-zone disputes

Arbitration in UAE civil and commercial matters rests on the parties' free agreement, which defines its scope and removes the dispute from the courts. The Ras Al Khaimah decree authorising the Free Zone chairman to set up an arbitration system for…