Wrongful Dismissal in UAE: Employee Claims and Employer Defense

An employer's reason for dismissing someone and the employer's record of that reason are not the same thing, and only the second one still exists once a complaint has been filed. Almost every employer that terminates an employee believes it had cause. Far fewer can point to a document, written before the decision, that says what the cause was and shows the employee was told. Federal Decree-Law No. 33 of 2021 keeps those two questions apart. It allows an employer to dismiss without notice for cause — serious misconduct, breach of trust, failure to perform the job. It also requires that a dismissal be substantiated with clear evidence, communicated in writing, and specify the grounds relied on. A reason that would satisfy the first requirement but has left no trace answering the second is, in a dispute, a reason the employer cannot use.

That gap between the reason and the record decides how these cases are argued. Where the record is thin, the argument stops being about whether the employee's conduct justified dismissal and becomes about what the employee is owed because the employer cannot show that it did. Article 51 of the 2021 law answers that second question with a figure, without any inquiry into how badly the employee behaved. An employer who fired a genuinely dishonest employee, and an employer who fired a competent one out of irritation, can end up in the same place if neither wrote anything down.

A second confusion sits underneath the first, and it is about money. Employees frequently arrive at conciliation with one number in mind and no clear sense of what it is made of. Compensation for a dismissal without valid reason and end-of-service gratuity are separate heads: calculated from different inputs, answering to different facts, and a claim for one is not a claim for the other. Employers who treat the final settlement as a single lump get this wrong as often as the employees claiming against them.

The consequence runs in both directions. An employee's case is assembled largely out of the employer's own file, or out of the holes in it. An employer's defence is not built during the dispute; by then the documents either exist or they do not. It is built during the employment, in the unglamorous work of writing things down as they happen.

Related Services: Our employment disputes team advises employers and employees on termination, MOHRE complaints and labour court proceedings, and our criminal case representation practice handles matters where a workplace allegation crosses into a criminal complaint.

The reason, and the record of the reason

Arbitrary dismissal means a termination that lacks a valid legal or contractual basis, or one carried out without the procedural safeguards the law requires. Both limbs matter, and the second is where most employers come unstuck. The law requires that a dismissal be communicated in writing and that the writing specify the grounds. A dismissal that fails that requirement may be treated as arbitrary regardless of what was happening in the workplace.

Records fail in three recognisable ways. The first is the decision taken verbally and never reduced to writing: a conversation, a handshake, a final salary transfer, and nothing on the file. The second is the document written afterwards, once someone realised a claim was coming; documents created after the decision read differently from documents created before it, and they are read that way. The third is the letter that exists but says nothing testable — a termination notice referring to "company policy" or "restructuring of the department" without naming the conduct, the date, or the policy. A ground stated at that level of generality cannot be examined, and a ground that cannot be examined is difficult to defend.

Consider a warehouse supervisor dismissed for repeated unexplained absence. If the absences were logged, if the supervisor was spoken to and the conversation recorded, if a written warning was issued and acknowledged, and if the termination letter names the dates and the prior warnings, the employer is arguing about facts. If the absences were real but nobody logged them, and the letter says only that employment is terminated with immediate effect, the employer is arguing about nothing. The conduct was the same in both scenarios. The position in the dispute is not.

This is why UAE courts and MOHRE examine the employer's conduct in the run-up to a dismissal, not only the dismissal itself. Where a termination follows a structured process — documented warnings, a performance improvement plan, an internal investigation with a written outcome — the causal link between the employee's conduct and the employer's decision is visible. Where the dismissal appears out of nowhere, that link has to be asserted rather than shown.

What an arbitrary-dismissal claim has to show

An employee's claim is not simply a complaint that the dismissal felt unfair. It is built from specific elements, each of which lives or dies on documents:

1. That the employment ended at the employer's initiative. Where an employer calls a departure a resignation and the employee says otherwise, the messages and the timing around the exit become the whole case.
2. That the termination lacked a valid legal or contractual basis, or that the required procedure was not followed. These are alternatives, not a single test. A dismissal can rest on real misconduct and still be attacked for the way it was carried out.
3. That the grounds were not communicated in writing, or were not specified. This is the element most often decisive, and it is answered by producing the termination letter and reading what it actually says.
4. What the employee is owed as a result. Quantum is part of the claim, not an afterthought, and it depends on the contract as much as on the dismissal.

Read against those elements, exposure is rarely about the strength of the employer's reasons. It is about whether the file supports them. Which is why claims that look weak on the merits settle for real money, and why claims that feel overwhelming to the employee fail against a warning letter they signed and forgot about.

Article 51 compensation and gratuity are two different sums

Where an employee is dismissed without a valid reason, Article 51 sets what is owed. For a contract running to a fixed end date, compensation is measured by the wages the employee would have received until that date. For an indefinite contract, the measure is a minimum of three months' wages. The calculation is not limited to basic salary: allowances and other contractual benefits form part of the wage figure.

The three-month figure functions as a floor rather than a ceiling. A court may award more where the employee proves further loss flowing from the dismissal, though UAE courts tend to confine compensation to financial losses that can be quantified rather than to claimed distress or reputational damage.

The contract drives the number more than anything the employee did. Take an employee on AED 20,000 a month. On an indefinite contract, the three-month measure produces AED 60,000. On a fixed-term contract with seven months left to run, the same dismissal produces AED 140,000 — a difference of AED 80,000 turning on a clause signed at the start of the relationship. Employers who never review their contract population discover this at the worst moment.

End-of-service gratuity sits alongside this as a separate calculation, worked out from the employee's length of service and final wage. It is not a wrongful dismissal remedy and it is not a substitute for Article 51 compensation. It is also a common own goal: getting the gratuity figure wrong gives the employee a second grievance, and evidence at conciliation that the employer was careless across the board.

	Article 51 compensation	End-of-service gratuity
What it responds to	A dismissal without a valid reason	The employment relationship ending
How it is measured	Wages to the end of a fixed term, or a minimum of three months' wages on an indefinite contract	Length of service and final wage
What moves the figure	Contract type, time remaining, and the wage including allowances and contractual benefits	How long the employee served and what they were finally paid
Relationship to the other	Separate heads. Recovering one does not answer a claim for the other.

What MOHRE does with the complaint

An employee alleging wrongful termination brings the matter to the Ministry of Human Resources and Emiratisation first. MOHRE conducts a preliminary examination and appoints a labour dispute resolution officer, whose function is to investigate the claim and attempt conciliation between the parties. The purpose is to resolve the dispute without formal litigation or arbitration. Where conciliation fails, the matter is referred onward to the competent labour court, or to a labour arbitration tribunal where the contractual and legal framework provides for one.

The procedure is designed to be accessible, which cuts both ways: it is open to an employee with no lawyer and a phone full of messages, and an employer who treats the first notification as routine administration can find the record closing around a version of events it never contested. Employers who do not participate effectively face outcomes reached largely on the material the other side supplied.

What the conciliation officer sees is a file. Not a narrative, not context, not what everyone at the company knows — a file. Conciliation is where an employer discovers whether its version of events exists in a form anyone else can read. An employer that arrives with a dated warning letter, an investigation note and a termination letter naming the grounds is negotiating from a position. An employer that arrives with recollections is negotiating about price.

Where a contract contains an arbitration clause, arbitration offers a more structured and confidential forum, which matters in cases with cross-border elements or a multinational employer, and litigation before the UAE courts remains available for disputes that do not resolve. In each forum the same material decides the case; the forum changes the procedure and the privacy, not the quality of the documents.

What a documented disciplinary record is actually worth

A disciplinary record earns its value from a small number of qualities, and records that lack them tend to be worth very little.

• It was written at the time. Contemporaneous notes describe events; retrospective notes describe positions, and the difference is visible on the page.
• It is specific. Dates, incidents, what was said, what was required to change. "Attitude problems" is not a ground; a record of three named incidents over six weeks is.
• The employee saw it. A warning the employee never received does not show a fair process. Acknowledgement, or at least proof of delivery, is what converts an internal note into evidence of procedure.
• It is consistent with everything else on the file. A dismissal for poor performance is difficult to sustain against a strong written appraisal signed weeks earlier, a contradiction employers create constantly because appraisals and disciplinary processes are run by different people who never compare notes.
• It shows the employee had a chance to respond. An investigation with a recorded outcome, and a note that the employee was heard, shows the fair process the law expects before a termination for cause.

A record with those qualities does more than win hearings. It lowers what a claim is worth in settlement, and it often prevents the complaint being filed at all: an employee already told in writing what the problem was, and given a chance to fix it, usually understands why the employment ended.

Defending the claim, and preventing it

Practical defence work divides into what can be done now and what should have been done earlier. Before any dispute exists, the contract does much of the work. Clear provisions on grounds for termination, notice, and the forum for resolving disputes remove ambiguity that would otherwise be argued over, and the contract type sets the ceiling on Article 51 exposure long before anyone is dismissed. Alongside that sits internal protocol: HR staff who know a verbal warning is not a warning, managers who understand that a decision is documented before it is executed, a template termination letter that requires the grounds to be filled in rather than gestured at, and the habit of reading the file before a dismissal is confirmed rather than after a complaint is served. Training and periodic review of contracts and practice are the mechanism, and neither is expensive next to one contested claim.

Once a complaint has landed, the work is narrower. Counsel engaged early can assemble the documentary record, prepare a coherent response for conciliation, test the employee's account against the contemporaneous material, and check the compensation calculation, which is often overstated where allowances and benefits are added to a figure that already includes them. Where the record genuinely will not support the employer's account, the honest advice is to price the exposure quickly and resolve the matter at conciliation, before costs accumulate around a position that will not improve.

Conclusion

Wrongful dismissal disputes in the UAE are decided in the space between what an employer knew and what it wrote down. The 2021 law permits dismissal without notice for cause, but conditions it: the decision must be evidenced, put in writing, and state its grounds. Where it is not, Article 51 supplies the measure of what the employee is owed, by reference to the contract rather than to the merits of anyone's behaviour. Gratuity is calculated separately, on service and final wage, and should never be folded into a single unexamined figure.

For employees, a claim is usually stronger or weaker than it feels, and the file settles which. For employers, the outcome is largely determined before the dismissal happens — in the contract that was signed, the warnings that were or were not issued, and the letter that either names the grounds or does not. Nour Attorneys advises on both sides of that line, from contract and policy work through MOHRE conciliation to labour court and arbitration proceedings.

Disclaimer

This article is for informational purposes only and does not constitute legal advice.

Additional Resources

Explore more of our insights on related topics:

• Workplace discrimination in the UAE: employee rights and employer duties
• Whistleblower protection in the UAE
• Employee data privacy: UAE employer obligations and compliance
• Domestic worker law in the UAE: employer obligations and rights