Lawful Termination or Arbitrary Dismissal

Lawful Termination or Arbitrary Dismissal

Have you ever faced an unfair dismissal from your employer?

In this article we will try to highlight one of the most important matters that are facing the parties of any employment contract whether employees or employers.

The UAE legislator has stipulates some rules to regulate and arrange the matter of termination of employment contract whether it happened by the employer or the employee so it will be lawful if it happened in specific circumstances or it will be considered as arbitrary dismissal.

Arbitrary dismissal is any form of dismissal or coerced resignation for unlawful or unproven reasons, or against the specific rules and regulations set down by the government.

When the employer has the right to terminate the contract?

Article 120 of the UAE Labour Law clearly states the following reasons for which termination without notice is deemed lawful;

“An employer may dismiss a worker without notice if and only if the worker:

  1. Assumes a false identity or nationality or submits forged certificates or documents.
  2. Is engaged on probation and is dismissed during or at the end of the probationary period; and
  3. Commits a fault resulting in substantial material loss to the employer, provided that the latter notifies the labour department of the incident within 48 hours of his becoming aware of its occurrence;
  4. Disobeys instructions on the safety of work or workplace, provided that such instructions are in writing and posted at a conspicuous place and are communicated verbally to the worker, in case he is illiterate;
  5. Defaults on his basic duties under the employment contract and fails to redress such default despite a written interrogation and a warning that he will be dismissed if such default is repeated;
  6. Reveals any confidential information of the firm for which he works.
  7. Is finally convicted by a competent court of a crime against honour, honesty or public morals.
  8. Is found in a state of drunkenness or under the influence of a narcotic drug during working hours.
  9. Assaults the employer, the manager in charge or any of his workmates during working hours.
  10. He is absent himself from work without a valid reason for more than 20 non-successive days in one single year, or for more than seven successive days.”

The above article states the reasons that give the employer the right to terminate the contract lawfully if applied without even a notice and it shall not be considered as arbitrary dismissal.

We at Yasin Al Hamed Advocates & Legal Consultants always advice our clients to follow all the rules required by the law before terminating their employment contract, it might be confused to apply and follow the rules and provision of law in different matters and different circumstances because eventually the result may be changed.

Redundancy can be valid reason for termination?

It was noticed that most of employment contracts are terminated because of redundancy, this tone was increased recently by the employers and used it as a valid reason to terminate the contracts as a result of the financial crisis.

Dubai Court of Cassation has stated clearly in its principles that although the employer has the right to arrange his company internally by reducing the employees or cancelling some posts in his company, but such termination for any employee shall be subject to the court supervision which will determine whether or not the employee is arbitrarily dismissed or if he was dismissed for a reason unconnected to the work.

When the employee has the right to terminate the contract?

Article 121 of the UAE Labour Law stated that:

“The Worker may abandon his work without notice in either of the following cases:

  1. If the employer fails to honour his obligations towards the worker, as provided for in the contract or in this law.
  2. If he is assaulted by the employer or the employer’s legal representative.”

The expression of “Employer’s obligations” which is mentioned in the previous article shall include all employees rights which are mentioned in their employment contract or the law, such as without limitation paying salaries, allowances, accommodation (if provided) and any commitments agreed in the contract. Therefore failing of the employer to comply with the above commitments will not only give the employee the right to terminate his contract but also to claim compensation for arbitrary dismissal as considered by the law. Such compensation shall be determined by the court taking in consideration what is stipulated in Article 123 that when assessing compensation for wrongful termination, to take into account the nature of the employee’s duties, the employee’s length of service, the amount of loss the employee has sustained as a result of the termination.



Interpretation of law provisions are so complicated so don’t decide termination of contract whether you are employer or employee based only on your personal knowledge, always try to have legal advice from employment lawyer who used to deal with that on daily basis; this will help to safe than sorry.


If you wish to discuss or have any questions, please contact Yasin Al Hamed Advocates and Legal Consultants :


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Registration for VAT in UAE

About VAT Registration in UAE

A business is a serious activity requiring time and effort usually being a commercial or sometimes an industrial enterprise within its pursue to overall profit-oriented. It is also a kind of work relating to the production, buying and selling of services or goods as it aims to make a profit.

The definition of business may cover several aspects of activities, such as industrial, commercial projects etc.

In the light of the executive regulations on value added tax VAT No. 52 for the year 2017 any business that exceeds the mandatory registration limit which is AED 375,000 over the past 12 months shall be registered for VAT. Also, any entrepreneur shall be register if the expected value of taxable supplies will exceed that limit within the next 30 days.

It is noteworthy that a Dh 20,000 fine shall be subjected to the one who fail to submit a registration application within the time frame specified in the tax law.

You can also register for VAT voluntary as your total value of taxable supplies exceeds the voluntary registration limit which is AED 187,000 over the past 12 months or it is expectable to be within the next 30 days.

The taxable supplies in which is determined by the law of VAT on the percent 5% or 0% of taxable goods or services carried out in the United Arab Emirates.

Good news also is that a ‘representative member’ who represent a group of companies shall have the right to register as a tax group in order to simplify the procedures and save costs as well provided that they have an establishment in the United Arab Emirates and are legal persons under common control.

Therefore, if you about to register for VAT keep in mind to bring records of all supplies and imports of goods and services, tax invoices, accounting records and documents in relation with the business activity. Henceforth, you will have to charge VAT on your business unless the zero-rated ones.

This significant financial mechanism makes a positive contribution to enhance the economy thus provide the country to keep going along the right line of sustainable economic development processes.


If you wish to discuss or have any questions, please contact Yasin Al Hamed Advocates and Legal Consultants :


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