When Employers Can be Held Responsible for Workers’ Actions: What the UAE New Law Says About Liability and Compensation

A construction company in the UAE can be held legally responsible for injuries caused by its workers while carrying out their duties, even if the harmful act was not specifically ordered or intended by the employer. This position has now been reinforced under the Federal Decree-Law No. (25) of 2025 promulgating the Civil Transactions Law, which sets out clear rules on employer liability for acts committed by employees during the course of their work.

Workplace accidents involving third parties are not uncommon, particularly in sectors such as construction where heavy materials and equipment are handled in public-facing environments. In situations where a worker’s actions result in injury to another person, questions often arise over whether the company itself can be held accountable.

Under Article 266 of the new law, a principal or employer is liable for harm resulting from a wrongful act committed by a subordinate if the act occurs during the performance of the employee’s duties or because of those duties. The law further clarifies that a relationship of subordination exists whenever the employer has actual authority over the worker in terms of supervision and direction, regardless of whether the employer personally selected the worker.

This means that if a construction worker, while carrying out site-related duties, negligently drops an object that injures a passer-by, the injured person may have the legal right to seek compensation directly from the company. The employer’s liability arises from the employment relationship itself and does not depend on proving that the company personally committed any fault.

The latest legal position has also been reflected in a recent Dubai Court of Cassation ruling issued in September 2025. The court confirmed that employer liability applies when an employee commits an error while performing their duties, when the job itself creates the circumstances for the error, or when the employee uses their position or the opportunities provided by the job to commit the harmful act.

The judgment further made it clear that an injured party can directly pursue the employer for damages without first establishing any independent wrongdoing by the employer. What matters is the existence of the employer-employee relationship and a clear connection between the employee’s conduct and their work responsibilities.

In practical terms, this means that a victim who suffers physical injuries and related financial losses — including loss of income or employment due to those injuries — may file a compensation claim against the employer. The court will then assess the extent of damages based on medical reports, evidence of financial loss, and other supporting documents.

At the same time, the law protects employers by allowing them to recover compensation paid from the employee responsible for the harm. Article 267 expressly gives the employer the right of recourse against the worker to the extent of that worker’s liability.

For businesses, especially in high-risk industries like construction, the updated law is a reminder of the importance of strict workplace safety standards, employee supervision, and adequate insurance coverage. For injured third parties, it provides a clearer path to compensation by placing legal responsibility on the entity that controls and benefits from the worker’s activities.

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