Unfair Dismissal: A Guide to Challenging Arbitrary Termination Under the Latest UAE Labour Law Amendments

The UAE’s labour regime has undergone significant refinement in recent years, offering clearer pathways for employees who believe they have been unfairly dismissed. Under the current legal framework, anchored in Federal Decree-Law No. 33 of 2021 and its subsequent amendments, employees now have structured remedies to challenge what is legally termed as “arbitrary termination.”

At the heart of the law lies the principle that employers cannot terminate employment without a valid and justifiable reason. If such a termination occurs, it may fall within the definition of arbitrary dismissal, entitling the employee to seek redress through administrative and judicial channels.

Understanding Arbitrary Termination

Arbitrary termination arises when an employer dismisses an employee without legitimate grounds, or for reasons unrelated to work performance, conduct, or operational necessity. Article 47 of the UAE Employment Law provides that such dismissals may attract compensation, subject to the employee demonstrating that the termination lacked a lawful basis.

The burden of proof, in practice, rests on the employee. This means that any challenge must be supported by documentation or evidence — such as employment contracts, termination letters, internal correspondence, or performance records — indicating that the dismissal was unjustified.

The First Step: Filing a Complaint

The process begins with the employee filing a formal complaint with the Ministry of Human Resources and Emiratisation (MoHRE). This step is mandatory and serves as the gateway to dispute resolution under UAE labour law.

Once a complaint is lodged, MoHRE assumes the role of mediator. The ministry examines the details of the dispute and engages both parties in an attempt to reach an amicable settlement. This stage is designed to be swift and cost-effective, allowing disputes to be resolved without escalating to litigation.

Recent amendments to the law have reinforced MoHRE’s central role in dispute resolution, mandating that all employment disputes be routed through the ministry before any court proceedings are initiated.

Amicable Settlement: A Legal Priority

The emphasis on amicable settlement reflects the UAE’s broader policy objective of reducing court congestion and encouraging negotiated outcomes. During this phase, both employer and employee are invited to present their positions, after which MoHRE may propose a settlement framework.

In many cases, disputes are resolved at this stage through mutual agreement, often involving compensation or settlement payments. However, where consensus cannot be reached, the law provides a clear escalation mechanism.

Referral to Court Within 14 Days

If mediation fails, MoHRE is required to refer the dispute to the competent court within 14 days of the complaint being filed. The referral includes a memorandum summarising the dispute, the arguments presented by both parties, and the ministry’s recommendations.

The case is then taken up by the court in the emirate where the employer is registered. From this point onward, the matter enters the formal judicial process, where evidence is examined, arguments are heard, and a binding judgment is issued.

Special Provision for Smaller Claims

One of the most notable changes introduced by the recent amendments is the expanded authority of MoHRE to adjudicate smaller disputes directly.

Where the value of a claim does not exceed Dh50,000, MoHRE itself has the jurisdiction to issue a binding decision, without referring the matter to court. This provision significantly reduces the time and cost involved in resolving lower-value disputes.

Additionally, MoHRE retains jurisdiction in cases where one party fails to comply with a previously agreed amicable settlement, regardless of the claim amount.

Challenging MoHRE Decisions

While MoHRE’s decisions in smaller disputes carry legal weight, they are not beyond challenge. Either party may file an objection before the competent Court of First Instance within 15 working days of being notified of the decision.

The law mandates an expedited timeline for such cases. Courts are required to schedule a hearing within three working days and issue a final ruling within 30 working days. Importantly, the enforcement of MoHRE’s decision is suspended once an objection is filed, pending the court’s final judgment.

Interim Relief: Protection of Wages

Another key safeguard introduced under the amended law is the provision for interim wage relief. In situations where a dispute results in the withholding of an employee’s salary, MoHRE has the authority to direct the employer to pay wages for up to two months.

This measure is particularly significant in protecting employees from financial hardship while disputes are ongoing. It underscores the law’s intent to balance employer rights with employee welfare during contested terminations.

Compensation for Arbitrary Dismissal

If an employee successfully proves that their termination was arbitrary, they may be entitled to compensation. The amount is determined based on factors such as the nature of the work, the duration of employment, and the extent of harm suffered.

While the law does not prescribe a fixed formula in all cases, compensation is typically capped and assessed by the court or relevant authority based on the merits of each case.

A Structured Path to Justice

The UAE’s updated labour law framework offers a clearly defined, multi-tiered process for addressing unfair dismissal. Beginning with administrative mediation and extending to judicial review where necessary, the system is designed to ensure both efficiency and fairness.

For employees, the key lies in timely action and proper documentation. Filing a complaint with MoHRE is not merely a procedural step — it is the foundation upon which any legal challenge must be built.

As the UAE continues to modernise its labour landscape, these provisions reflect a growing emphasis on transparency, accountability, and access to justice in employer-employee relationships.


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