Redundancies, dismissals, and terminations are quite common practices. It becomes even more frequent when the economy is saturated. It becomes inevitable for businesses to terminate and be redundant for their survival. Once the economy reaches its saturation point, businesses try to survive. Therefore, redundancies and changes are necessary for survival and success. The UAE labor market is indifferent. The UAE labor market follows properly defined labor laws.
Nevertheless, it is guided by predefined laws and regulations. They are essential to ensure clarity and transparency. It also helps in handling redundancy, termination, and dismissal in UAE. Here the role of a labour and employment lawyer is essential. He can assist in better understanding the UAE labor laws. It is necessary for both parties to fully understand their rights and obligations.
Legal Framework in United Arab Emirates
Legal Framework in the United Arab Emirates is fully functional and provides employers and employees with comprehensive guidelines. Nonetheless, it is outlined in the Federal Decree-law of 2021. The law is based on labor and employment relations. Federal Decree Law on labor and employment relations is applicable to all the employees and employers working in the private sector of UAE. The law was modified in 2022 and it is also called UAE labor law. It serves labor hiring, labor rights, labor terminations, labor redundancy, and much more.
UAE labor law of 2022 is completely altered according to the best international practices to preserve the rights of employees and employers. This law is applicable to all the employees who work under the Ministry of Human Resources and Emiratization MOHRE. However, it excludes employees such as domestic helpers, and workers on government payroll.
UAE Labour Law and Redundancy Law
In UAE labor laws, the redundancy laws are explained comprehensively. Firstly, the law explains the definition of redundancy. Labor redundancy in UAE occurs when the employee position is removed, vacated, or eradicated from the business. It normally happens due to the company’s restructuring. Labour redundancy usually happens during economic downturns, economic crunches or market saturation. Furthermore, it can also be a direct result of technological advancements. This results from redundancies in skills, knowledge, or technique.
Reasons for Redundancy
We will discuss the valid and legitimate reasons for labor redundancy in the UAE. It often happens in companies due to financial constraints. A lot of businesses that face monetary challenges end up removing workers from different positions at different levels of the hierarchy. Another prominent reason for labor redundancy in the UAE is the introduction of new innovations, the latest techniques, or technological advancements taking place. This makes the workers go absolute and now their skills, expertise, or understanding is no more needed.
Organization Restructure
Organizational restructuring is another reason for this. The dismissals and terminations in UAE become quite common when the company undergoes organizational revamping. The changes introduced within the company led to labor redundancy.
Business Relocation and Dismissals
Furthermore, business relocation also results in dismissals. Whenever a business decides to relocate somewhere else, it dismisses a greater number of employees. Besides, another eminent reason for labor redundancy is the closure of business. Once the business shuts down, it leads to labor termination in the UAE. However, it is important to understand that it is the obligation of the employer to communicate the redundancy to employees. The labor redundancy in the UAE must be based on solid reasoning.
Valid Grounds
Therefore, the dismissals should be based on a genuine basis and valid grounds. UAE dismissal law demonstrates the grounds for valid and legal redundancy.
Unlawful redundancy is unacceptable. This will allow the workers to seek compensation for unfair dismissal in the UAE. It is the employer’s obligation to ensure all the UAE dismissal laws are followed.
They need to implement the UAE labor laws to ensure legitimate labor redundancy. Compliance is necessary to ensure it happens within the legal framework.
UAE’s Dismissal Law
According to the UAE dismissal law, it is essential to send written notification to the employee. The employer has the obligation to send the first notice of termination within 30 to 90 days. Notice of termination must be according to the employment contract. Employees will receive all the entitlements. The unpaid salaries and end-of-the-service benefits will be paid immediately to the workers following redundancy. It is obligatory for an employer to pay employees their salary and other labor benefits according to the law. It includes end-of-the-service gratuity, severance pay, unpaid commission, monthly salary, and more.
The employer needs to complete all the documentation by adhering to the legal procedure. The employee needs to document the reasons for redundancy. They also need to make sure the procedure aligns with the legal specifications. Here it is essential to note that any ambiguity or vagueness will result in labor disputes or claims for unfair dismissals.
On the other hand, the employees have the right to receive compensation due to unfair dismissal. UAE labor laws state the rights of employees facing redundancies in the UAE. Termination in the UAE does not mean that an employee is deprived of the benefits. The employees must receive the notice period according to their employment contracts.
If any party steps back from the notice period, the compensation is sought. Secondly, it is the right of the worker in UAE to receive the end of the service gratuity. It is calculated at the end of their term and must be paid to the employee.
In case the employee thinks that redundancy is unlawful, he has reserved the right to launch a complaint against an employer. The complaint is filed with MOHRE. The employee enjoys the rights which are given to all private-sector workers in the Emirates.
The employee is given the full right to search for a new job. This freedom is given to the employee once the notice period is sent. This allows the employee to search for a decent job. Therefore, it is necessary that the redundancy is fair and transparent. It should be compliant with the UAE labor laws. Any wrong decision can easily be challenged in UAE labor courts. The employee is bound to provide complete, concise, and clear paperwork. It is needed to justify the decision made regarding labor redundancy. Besides, they must fulfill the specifications to avoid legal disputes.
