Fired Without Warning in UAE? Wrongful Dismissal Guide

What laws govern employment and labour in the UAE?

The UAE mainland private sector is primarily governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations and its Executive Regulations (Cabinet Resolution No. 1 of 2022). Certain free zones, such as DIFC and ADGM, have their own employment laws, while public sector and domestic worker relationships are subject to separate legislation.

Main sources of labour law in the UAE (mainland)

• Federal Decree-Law No. 33 of 2021 - the core labour law for private-sector employment.
• Cabinet Resolution No. 1 of 2022 - Executive Regulations that detail implementation (contracts, working time, leave, etc.).
• Federal Decree-Law No. 20 of 2023 (and amendments, where applicable) - making adjustments, including Emiratisation enforcement and penalties.
• Ministerial Resolutions by MOHRE - rules on Wages Protection System (WPS), midday work ban, Emiratisation quotas, and specific sectoral rules.
• Federal Decree-Law No. 10 of 2017 on domestic workers - separate regime for domestic staff (not covered by the main labour law).

Key authorities

• MOHRE (Ministry of Human Resources and Emiratisation) - regulates mainland private-sector employment, contracts, WPS, complaints, and inspections.
• Labour Courts (within the local Judicial Departments, e.g., Dubai Courts, Abu Dhabi Judicial Department) - handle employment disputes after MOHRE referral.
• Free zone authorities (e.g., JAFZA, DMCC, TECOM) - administer labour matters in their zones, usually still applying MOHRE law except in DIFC and ADGM.
• DIFC Authority & DIFC Courts and ADGM Authority & ADGM Courts - separate common law-style employment regimes with their own courts.

How are employment contracts structured in the UAE?

UAE mainland employment relationships must be documented in a written fixed-term contract (up to 3 years), registered with MOHRE. Contracts can be renewed or extended, and must include mandatory information such as job title, salary, working hours, and leave entitlements.

Mandatory contract features (mainland, MOHRE)

• Form and language
  • Standard MOHRE format (electronic contracts) in Arabic as the official language.
  • Bilingual contracts (Arabic plus English or another language) are common for clarity; in conflict, Arabic usually prevails before courts.
• Fixed-term only
  • All contracts are fixed-term up to 3 years, renewable or extendable for similar or shorter periods.
  • On renewal, service is treated as continuous for end-of-service and other rights.
• Core details that must appear
  • Employer and employee details (names, IDs, addresses).
  • Job title and description.
  • Work location.
  • Basic salary, allowances, and payment frequency.
  • Working hours and weekly rest day.
  • Start date and contract term.
  • Probation period, if any.
  • Leave entitlements (annual leave, sick leave, maternity, etc.).
  • Notice periods for termination.

Probation periods

• Maximum 6 months; no extension beyond 6 months is permitted.
• Employer termination during probation:
  • Must give at least 14 days' written notice.
• Employee resignation during probation:
  • 1 month notice if joining another UAE employer (new employer may have to reimburse recruitment costs).
  • 14 days notice if leaving the UAE.

Contract types and work models

Under the new law, multiple work models exist, which can be reflected in the contract type:

• Full-time - employee works full working hours for one employer.
• Part-time - fewer hours or days; employees may work for more than one employer with MOHRE approval.
• Temporary - contracts for specific projects or periods.
• Flexible work - variable hours/days based on workload.
• Remote work - employees work outside the traditional office; recommended to have clear policy on hours, tools, and expenses.

Non-competes and restrictive covenants

• Non-compete clauses are allowed if:
  • They are necessary to protect legitimate business interests.
  • They are limited in time, place, and scope of work.
• In practice, courts are cautious; clauses longer than 2 years and overly wide geographic scope may be reduced or disregarded.
• For key employees, employers often combine contractual non-competes with:
  • Strong confidentiality clauses.
  • IP assignment clauses.
  • Garden leave provisions in senior contracts (where workable).

What are the rules on working hours, overtime, and rest days in the UAE?

Standard working hours in the UAE mainland are 8 hours per day or 48 hours per week, with reduced hours for some sectors and during Ramadan. Overtime must be paid at statutory premiums, and employees must receive at least one weekly rest day, usually Sunday under the current workweek.

Standard working hours

• Daily: 8 hours per day (up to 9 hours in some sectors like trade and hospitality by decision of MOHRE).
• Weekly: 48 hours maximum, excluding breaks.
• Ramadan: Working hours typically reduced by 2 hours per day for Muslim employees; many employers apply it to all staff as a policy.

Overtime rules

Overtime is usually any work beyond the normal daily hours, subject to certain caps and premiums.

• Maximum 2 hours overtime per day, except in limited emergency situations.
• Daytime overtime (not between 10 pm and 4 am):
  • Employee receives basic hourly wage plus at least 25% premium.
• Night overtime (between 10 pm and 4 am):
  • Employee receives basic hourly wage plus at least 50% premium.
• Rest-day overtime:
  • If the employee works on their weekly rest day and no alternative rest day is given, they are entitled to basic wage plus at least 50% premium.
• Senior managerial or supervisory positions may be excluded from overtime entitlement if clearly defined and paid accordingly.

Breaks and rest days

• Employees must not work more than 5 consecutive hours without a break.
• Breaks should be at least 1 hour total per day (for rest, food, and prayer); breaks are unpaid unless company policy states otherwise.
• Employees must have at least 1 weekly rest day; most private employers now follow the Monday-Friday workweek with Sunday as rest day (some still use Friday for certain roles).

Summer midday work ban

• Applicable to outdoor work (construction, etc.).
• Typically from mid-June to mid-September (exact dates announced annually by MOHRE).
• Outdoor work is prohibited usually between 12:30 pm and 3:00 pm, except for emergency or essential services.
• Employers must reschedule tasks or provide shaded rest areas and cooling measures.

What leave entitlements must UAE employers provide?

UAE law grants minimum leave entitlements including annual leave, sick leave, maternity and parental leave, bereavement leave, and study leave. Employers can enhance these entitlements by contract or policy but cannot go below the statutory minimums.

Annual leave

• Less than 6 months of service: leave accrues but usually cannot be taken as full paid annual leave unless agreed.
• 6 months to 1 year of service: at least 2 days per month of paid leave.
• More than 1 year of service: at least 30 calendar days of paid annual leave per year.
• Employers may determine the leave schedule but must consider business needs and employee circumstances.
• Payment:
  • Annual leave is paid based on the employee's full salary (basic plus regular allowances).
  • Unused leave on termination is paid out based on basic plus allowances, calculated on a daily rate (usually 30-day month).

Sick leave

• Employee must complete 6 months of service to qualify for paid sick leave.
• Maximum sick leave: 90 days per year, consecutive or non-consecutive.
• Payment structure:
  • First 15 days: full pay.
  • Next 30 days: half pay.
  • Next 45 days: unpaid.
• Employee must notify employer and provide medical certificate from an approved clinic/hospital.
• Employer may terminate if employee exhausts sick leave and cannot return, but must properly calculate entitlements and follow notice rules.

Maternity and parental leave

• Maternity leave (for women employees):
  • 60 days total.
  • First 45 days on full pay, next 15 days on half pay, subject to length-of-service conditions in practice.
  • Additional 45 days unpaid leave available if the employee has complications or a sick child (supported by medical certificate).
• Parental leave (for both parents):
  • 5 working days paid parental leave, usable within the first 6 months of the child's birth.

Other statutory leaves

• Bereavement leave:
  • 5 days on the death of a spouse.
  • 3 days on the death of a parent, child, sibling, grandchild, or grandparent.
• Study leave:
  • 10 days per year for employees with at least 2 years of service enrolled in UAE-accredited educational institutions.
• Unpaid leave:
  • Possible by agreement; unpaid leave typically suspends salary and may affect accruals depending on policy and duration.

How are salaries, deductions, and WPS regulated in the UAE?

UAE law requires salaries to be paid in UAE dirhams, on time, and through the Wages Protection System (WPS) for most mainland employees. Deductions are strictly controlled and employers face sanctions if they delay or underpay wages.

Salary structure

• Basic salary: the core amount used to calculate end-of-service gratuity and often overtime.
• Allowances: housing, transport, travel, utilities, cost of living, and other regular allowances.
• Variable pay: bonuses, commissions, incentives - these can be contractual or discretionary; treatment should be clearly defined.

Payment rules and WPS

• Salary must be paid at least once a month for monthly-paid staff.
• Most mainland employers must pay via the Wages Protection System:
  • Salaries are transferred through UAE banks/exchange houses directly into employee accounts.
  • MOHRE monitors WPS data to detect late or incomplete payments.
• Late payment can trigger:
  • Suspension of new work permits.
  • Administrative fines.
  • Potential criminal complaints in serious or repeated cases.

Deductions and set-offs

• Employers may only deduct in limited cases, such as:
  • Social security (for UAE/GCC nationals) and court-ordered deductions.
  • Repayment of loans or advances, subject to caps (e.g., total deductions should not exceed a set proportion of salary, commonly 50%).
  • Fines imposed for disciplinary breaches, in line with an approved disciplinary policy.
• Unlawful deductions can be challenged before MOHRE and the labour courts.
• Employers should obtain written consent for any non-mandatory deduction and clearly document the basis.

Typical cost items for UAE employers (mainland)

Actual costs change regularly; employers should check current MOHRE and local authority schedules before budgeting.

What compliance obligations do UAE employers have (including Emiratisation and health & safety)?

UAE employers must comply with MOHRE rules on contracts, WPS, health and safety, and Emiratisation quotas for certain companies. Non-compliance can result in fines, visa/work permit restrictions, and potential criminal liability in serious cases.

Core compliance obligations

• Use MOHRE-approved contracts and register all employees.
• Pay wages on time through WPS.
• Provide statutory leave and benefits.
• Maintain appropriate health and safety standards at the workplace.
• Keep personnel records (contracts, attendance, salary slips, leave records, disciplinary records).

Emiratisation (Nafis) requirements

• Applies to mainland private-sector companies meeting certain size and sector thresholds, particularly those with 50 or more employees.
• Employers must maintain a minimum percentage of UAE nationals in skilled roles (target percentage has been increasing annually).
• Failure to meet quotas can lead to:
  • Annual financial contributions (penalties) per missing Emirati employee, which can reach tens of thousands of dirhams per year, per role as of 2024.
  • Downgrading of company classification by MOHRE (leading to higher work permit fees).
• Employers should register with the Nafis platform, advertise roles, and build Emiratisation plans, including training, mentorship, and career progression for nationals.

Health & safety

• Employers must:
  • Provide a safe work environment and equipment.
  • Conduct risk assessments and safety training.
  • Record and report work-related accidents and occupational diseases.
• Sector-specific rules apply in construction, oil & gas, and other high-risk industries, including mandatory personal protective equipment and training.
• Failure may result in fines, closure orders, and liability for injuries or deaths.

How can employment be terminated in the UAE and what notice is required?

Employment in the UAE can be terminated with notice for a legitimate reason, without notice in limited misconduct cases, or by mutual agreement. Notice periods typically range from 30 to 90 days, and wrongful termination may trigger compensation in addition to statutory entitlements.

Lawful termination methods

• By mutual agreement (signed settlement or mutual termination agreement).
• By expiry of the fixed-term contract if not renewed.
• By either party with notice for a valid reason (e.g., redundancy, performance, restructuring).
• Immediate termination without notice for serious misconduct, but only in specific situations listed in the law.

Notice periods

• Minimum statutory notice: 30 days.
• Maximum typically: 90 days, unless a shorter period is agreed upon at separation.
• Notice must be in writing and served in accordance with the contract (email is often accepted if contract allows).
• Employer may place employee on garden leave during notice, provided full salary and benefits are paid.

Termination for cause (summary dismissal)

Immediate termination without notice is allowed only for specified serious breaches, such as:

• Use of false identity or forged documents.
• Gross negligence causing major loss to employer.
• Disclosure of trade secrets.
• Being under the influence of drugs or alcohol at work in certain contexts.
• Repeated rule violations despite written warnings.

Employers must be prepared to prove the misconduct with evidence. If the court finds cause not established, the termination may be treated as arbitrary.

Employee resignation

• Employee must give contractual notice (30 to 90 days).
• Resignation can be submitted in writing; employer cannot refuse but can negotiate last working day.
• Non-compete obligations may still apply after resignation if valid and enforceable.

Arbitrary or wrongful termination

• Termination is arbitrary if:
  • The reason is unrelated to work (e.g., discrimination, retaliation for complaint), or
  • Employer misuses its right to terminate in a way that is unfair.
• Court may award up to 3 months' total salary as compensation (basic plus allowances), in addition to:
  • Notice pay if notice not given.
  • Unused leave pay.
  • End-of-service gratuity.
  • Unpaid salary or other contractual entitlements.

How is end-of-service gratuity calculated in the UAE?

End-of-service gratuity (EOSG) is a lump sum due to eligible employees on termination, calculated based on their basic salary and years of service. The standard formula grants 21 days of basic pay per year for the first 5 years and 30 days per year thereafter, subject to caps and adjustments.

Eligibility

• Applies to full-time employees under the labour law who complete at least 1 year of continuous service.
• Does not normally apply to UAE national employees who are covered by pension schemes, or to certain categories like casual workers under specific conditions.

Standard EOSG formula (mainland, private sector)

• Identify the last basic monthly salary (excluding allowances and bonuses).
• Convert to a daily rate:
  • Daily basic salary = Basic monthly salary ÷ 30.
• Apply:
  • First 5 years of service: 21 days basic salary per year.
  • More than 5 years: 30 days basic salary per additional year.
• Total EOSG normally capped at 2 years of basic salary.

Illustrative EOSG calculation

The new labour law removed the old rule that reduced gratuity when employees resigned under unlimited contracts; now, resignation and dismissal generally lead to the same EOSG formula, assuming eligibility and no gross misconduct resulting in forfeiture.

How are workplace disputes resolved in the UAE?

Most employment disputes in the UAE start with a complaint to MOHRE or the relevant free zone authority, followed by referral to the labour court if unresolved. Employees are generally exempt from court fees up to a certain claim value, and claims must usually be filed within 1 year of the alleged violation.

Step-by-step dispute process (mainland)

1. Internal resolution
   • Employee raises the issue with HR/management in writing.
   • Employer investigates and attempts settlement (meeting, written response, etc.).
2. MOHRE complaint
   • Employee or employer files complaint via MOHRE app, website, call center, or Tasheel service center.
   • MOHRE arranges mediation; parties may be invited to attend a meeting or submit documents.
   • If settlement is reached, MOHRE can record it as a binding agreement.
3. Referral to labour court
   • If unresolved, MOHRE issues a referral letter to the competent labour court.
   • Claim must be filed along with the referral within the specified period.
4. Court proceedings
   • Statement of claim, defense, and evidence (contracts, emails, WPS records, etc.) are submitted.
   • The court may appoint an expert to calculate entitlements.
   • Judgments can be appealed within statutory deadlines (often 15 or 30 days, depending on stage and amount).
5. Enforcement
   • Successful party can request enforcement (attachment of bank accounts, travel bans, etc.).

Costs and fees in labour disputes

Exact fee levels vary by emirate and are updated frequently, so parties should check the current fee schedules or consult a lawyer.

Deadlines and limitation periods

• Under Federal Decree-Law No. 33 of 2021, labour courts will not hear claims filed more than 1 year after the date of the alleged violation.
• Employees should therefore act quickly if salary, leave, or termination disputes arise.
• Appeal deadlines are short; parties should read judgments carefully and seek legal advice immediately if they consider appealing.

What special rules apply in UAE free zones like DIFC and ADGM?

Most free zones apply the federal labour law via MOHRE, but the DIFC and ADGM have their own common law-style employment regulations and courts. Employers in these zones must align contracts, policies, and dispute strategies with the specific regime that applies.

Free zones applying MOHRE rules

• Examples: JAFZA, DMCC, DAFZA, KIZAD, RAKEZ, and many others.
• Labour law: Federal Decree-Law No. 33 of 2021 and MOHRE regulations.
• Authority: Free zone authority plus MOHRE; disputes often still go through MOHRE and regular labour courts.
• Contracts: Signed in free zone format but must comply with MOHRE standards.

DIFC and ADGM

• DIFC:
  • Law: DIFC Employment Law (e.g., Law No. 2 of 2019, as amended).
  • Features: Monthly accrual-based end-of-service regime for some employers, different working time rules, and robust anti-discrimination provisions.
  • Disputes: Heard in DIFC Courts or Small Claims Tribunal (SCT) for lower-value claims.
• ADGM:
  • Law: ADGM Employment Regulations.
  • Features: Common-law drafting, specific provisions on notice, leave, and termination; explicit whistleblowing and anti-retaliation protections.
  • Disputes: Heard in ADGM Courts.

Employers with group structures across mainland, free zones, DIFC, and ADGM must carefully map which law applies to each employee and adjust contracts, handbooks, and benefit plans accordingly.

When should you hire a UAE employment lawyer or expert?

You should engage a UAE employment lawyer or HR/legal expert when designing contracts and policies, restructuring or terminating employees, or handling any significant dispute or investigation. Early advice usually reduces risk, costs, and reputational damage.

Key situations for employers

• Before hiring and onboarding
  • Drafting or reviewing employment contracts and offer letters.
  • Designing salary structures, bonus schemes, and EOSG alternatives (e.g., savings plans, where allowed).
  • Ensuring compliance with Emiratisation, WPS, and visa rules.
• Policy and handbook development
  • Creating disciplinary, grievance, and performance management procedures that align with UAE law.
  • Drafting remote work, data protection, and social media policies.
• Restructuring and terminations
  • Planning redundancies or business closures.
  • Managing poor performance terminations and documenting the process.
  • Structuring settlement agreements, waivers, and mutual terminations.
• Investigations and disputes
  • Handling harassment, discrimination, or misconduct allegations.
  • Responding to MOHRE complaints or inspections.
  • Defending or bringing claims in labour courts, DIFC/ADGM courts, or free zone tribunals.

Key situations for employees

• Receiving a complex contract with non-compete, IP, or bonus provisions.
• Facing termination, redundancy, or forced resignation.
• Experiencing unpaid salary, unpaid EOSG, or significant policy breaches.
• Encountering discrimination, harassment, or retaliation after raising concerns.

What are the immediate next steps for employers and employees in the UAE?

Employers should audit their contracts, policies, and HR practices against the current UAE labour law and free zone rules, then close any gaps. Employees should keep complete records and seek advice early if a problem arises, especially around salary, leave, or termination.

Next steps for employers

1. Map your workforce
   • List all entities and locations (mainland, each free zone, DIFC, ADGM).
   • Confirm which law applies to each employee group.
2. Review contracts and policies
   • Ensure all contracts are fixed-term and MOHRE-compliant where required.
   • Check notice periods, non-competes, overtime clauses, and leave provisions.
3. Check compliance systems
   • Verify WPS payments, visa status, and health insurance coverage.
   • Review safety procedures, especially for high-risk roles and outdoor work.
4. Plan for Emiratisation (if applicable)
   • Confirm your quota, current national headcount, and any shortfall.
   • Develop recruitment, training, and retention strategies for UAE nationals.
5. Set up dispute and investigation protocols
   • Define clear internal grievance and disciplinary processes.
   • Train managers on documentation and respectful handling of issues.
6. Engage specialist legal support
   • Build a relationship with a UAE employment lawyer or advisor for ongoing questions and updates.

Next steps for employees

1. Keep copies of your contract, offer letter, payslips/WPS records, and leave approvals.
2. Raise concerns in writing to HR/management with clear facts and dates.
3. If unresolved, consider contacting MOHRE or your free zone authority promptly (within 1 year of the issue).
4. For complex or high-value issues (termination, large unpaid sums), consult an employment lawyer before signing any settlement.