Illegal Termination of Employment under UAE Labour Law: An Analysis of Article 47 and Legal Protection Against Dismissal

The protection of employees against arbitrary or retaliatory dismissal is a central feature of modern labour legislation. In the United Arab Emirates, this protection is codified under Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relationships (the “UAE Labour Law”), which came into force to balance the interests of employers with the fundamental rights of workers. Article 47 of the UAE Labour Law specifically addresses the concept of illegal or unlawful termination of a worker’s service and establishes a clear remedial framework where such termination is proven.

Understanding the Concept of Illegal Termination

Article 47 recognises that while employers retain the right to manage their workforce and terminate employment contracts in accordance with the law, this right is not unfettered. A termination is considered illegal when it is carried out for reasons unrelated to work performance, operational requirements, or other lawful grounds recognised under the Labour Law.

In particular, Article 47 places emphasis on protecting workers from dismissal motivated by retaliation or bad faith. For instance, termination arising because a worker has filed a legitimate complaint with the Ministry of Human Resources and Emiratisation (MoHRE) or initiated legal proceedings against the employer is deemed unlawful. This provision reflects the legislature’s intent to encourage access to justice and to ensure that workers are not penalised for asserting their statutory rights.

Distinction from Lawful and Summary Termination

It is important to distinguish illegal termination under Article 47 from lawful termination and summary dismissal. The UAE Labour Law permits termination with notice for legitimate reasons, subject to compliance with statutory notice periods and contractual obligations. In addition, Article 44 allows summary dismissal without notice in narrowly defined circumstances, such as gross misconduct, proven dishonesty, or serious breaches of workplace safety obligations.

Where an employer successfully demonstrates that a termination falls within Article 44, or is otherwise justified under the law, Article 47 will not apply. Illegal termination, therefore, does not encompass every dismissal perceived as unfair by a worker, but rather those that lack a lawful basis or are tainted by improper motive.

Burden of Proof and Judicial Assessment

Article 47 introduces an important procedural safeguard by placing the burden of proof on the employer once a worker alleges illegal termination. The employer must demonstrate that the dismissal was based on legitimate, work-related reasons and not on retaliation, discrimination, or arbitrariness.

The competent court is vested with broad discretion to examine the facts, employment records, internal communications, and surrounding circumstances. UAE courts have consistently adopted a substance-over-form approach, focusing on the real reason behind the termination rather than its stated justification. This level of judicial scrutiny plays a vital role in preventing abuse of managerial authority.

Compensation for Illegal Termination

One of the most significant aspects of Article 47 is the remedy available to the worker. Where illegal termination is established, the court may award compensation to the employee in addition to other statutory entitlements, including end-of-service benefits, notice pay, and accrued leave.

Compensation for illegal termination is capped at a maximum of three months’ wages, calculated on the basis of the worker’s last received salary. In determining the appropriate amount within this limit, the court considers factors such as the nature of the termination, the extent of harm suffered by the worker, the length of service, and the employer’s conduct.

This capped compensation reflects a balanced legislative approach, offering meaningful redress to workers while ensuring predictability and proportionality for employers.

No Automatic Reinstatement

Unlike some jurisdictions where reinstatement may be ordered, the UAE Labour Law does not provide for the automatic reinstatement of a worker following illegal termination. The remedy under Article 47 is primarily compensatory rather than restorative. This approach aligns with the contractual nature of employment relationships in the UAE and acknowledges the practical difficulties of enforcing continued employment where trust has irretrievably broken down.

Practical Implications for Employers

Article 47 serves as a cautionary provision for employers operating in the UAE. Termination decisions must be carefully documented, objectively justified, and free from any appearance of retaliation or arbitrariness. Employers are advised to maintain clear performance records, follow progressive disciplinary procedures where applicable, and ensure that dismissals are consistent with internal policies and statutory requirements.

Failure to comply may expose employers to financial liability and reputational damage, as well as increased scrutiny from regulatory authorities.

Conclusion

Article 47 of the UAE Labour Law represents a critical safeguard against illegal termination of service, reinforcing principles of fairness, accountability, and access to justice within the employment relationship. By clearly defining unlawful termination and providing a structured remedy, the legislature has strengthened worker protection while preserving managerial flexibility within lawful boundaries.

For workers, Article 47 offers reassurance that the law will intervene where termination is driven by bad faith or retaliation. For employers, it underscores the importance of lawful, transparent, and well-reasoned decision-making. As UAE labour jurisprudence continues to evolve, Article 47 will remain a cornerstone in shaping equitable employment practices across the country.

 

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