Dubai: Court of Cassation Rules Unfair Dismissal has to be Compensated

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Analysis

Following a Dubai Court of Cassation ruling stating employees who are unfairly dismissed must be compensated, Bushra Mahdi, Associate, Litigation at Habib Al Mulla & Company examines the key facts of the case and the potential impact of the judgment.

Legislative Framework

What is the legislative framework for termination of employment and remedies in Dubai?

We must distinguish between employment contracts for a limited time and employment contracts for an unlimited time.

Under UAE Labour Law, Article 115 of Federal Law No. 8/1980:

“Where a contract is for a limited period of time and the employer revokes it for reasons other than those specified in Article 120, he shall be required to compensate the worker for any prejudice the latter sustains, provided the amount of compensation shall in no case exceed the aggregate remuneration due for a period of three months or the residual period of the contract whichever is shorter unless the contract contains a provision to the contrary.”

Article 116 provides: