Normally, redundancy takes place when an employee or worker is dismissed due to no fault of their own. It usually occurs when the employer no longer requires the services of the role of an employee. This could be a direct result of factors such as business closure, company restructuring, downsizing, introduction of new technologies, bankruptcy, business insolvency, mergers, takeovers, acquisitions, and the list goes on.
Redundancy and Federal Laws
Redundancy is not explicitly defined in UAE labor laws. However, Federal Decree-Law no 33 of 2021 and Article 42 c explains and recognizes the termination due to business closure, bankruptcy, and insolvency as the valid and lawful basis for terminating the employment contract.
Here the employer must be aware that redundancy cannot be used as a disguise for discriminatory dismissal or unfair termination. In case an adequate legal process is not adhered to, the redundancy may be deemed illegal and unlawful. This will make the employer liable to pay compensation. It also causes reputational damage. Attorney with labour law UAE expertise is called as labour and employment lawyer.
Labour and Employment Lawyers in Dubai
Labour and Employment lawyers in the UAE can facilitate employees and employers in challenging times. They can ensure the legal validity of the redundancy in the UAE. They offer useful legal support regarding drafting documentation. They also manage compliance with UAE labour laws.
As per the UAE labour law, the minimum period of 30 days must be served before termination or otherwise, it is agreed in the contract before the head.
A Written Notice
Redundancy in the UAE requires an employer to provide a written notice with valid justification. Moreover, they need to make sure all the outstanding dues are cleared. It includes unpaid salary, end-of-the-service gratuity, benefits, and unused leaves.
According to the UAE redundancy law, it is essential to pay off the end of the services gratitude. The employer can cancel the work permit and visa of the employee. Failure to do so will lead to serious legal implications.
UAE Redundancy Laws for Emiratis and Expatriates
Redundancy laws in UAE apply to all employers and workers working in UAE. Nonetheless, UAE nationals or Emirati citizens enjoy additional protection. Under the process of Emiratization, they seek privilege over other workers.
Notify to MOHRE
Any employer who is planning to terminate UAE nationals should notify MOHRE. Besides, they must adhere to the strict approval procedure. Additionally, arbitrary dismissal of UAE nationals can result in hefty fines, suspension of work permits, and even blacklisting. Conversely, the expatriates are also shielded under UAE labor laws. They can rely on strong contract terms and conditions to secure themselves.
Frequently Asked Questions (FAQs)
Redundancy is legalized in the UAE?
The answer is yes. Redundancy is permitted in the Emirates under certain conditions. Moreover, it is based on valid business reasons that include downsizing, restructuring, and closure of the company.
Are there any laws for redundancy in the UAE?
Yes, there are proper UAE labor laws that govern the redundancies in the region. There are adequate procedures and regulations set out under the labor laws that help prevent arbitrary dismissal.
Employment and labor lawyers can assist in offering legal guidance regarding the laws and provisions. Besides, they can ensure the accurate and full implementation of the redundancy laws.
Is an employee entitled to receive the compensation after redundancy in UAE?
Yes, employees in UAE are entitled to receive the full salary during the notice period that consists of at least 30 days. Additionally, they also receive the end of the services gratuity, unpaid leaves, contractual benefits, and unpaid salary if any. Notice period can be maximum 3 months, as per UAE Labour Law.
Is the employer allowed to dismiss based on the claims of redundancy without prior notice?
The answer is no. UAE labor law indicates that a minimum notice period of 30 days is mandatory in case of redundancy however, if it is stated in the employment contract, then redundancy can proceed without prior notice. Dismissals without prior notice can easily be challenges in the UAE labor courts. They can order employers to pay compensation.
Can an employee challenge the unfair redundancy in UAE?
Employment and labor lawyers in the UAE can assist in filing a complaint with the Ministry of Human Resources and Emiratization (MOHRE). In case, the mediation fails the case can move to UAE labor courts. Professional labor lawyers in UAE can guide you with documentation, launching a complaint, and even legal representation if required.
Emirate nationals are protected in redundancy cases?
Yes, Emirati or UAE nationals enjoy more benefits and extra protection compared to expatriates working in the UAE. They are safeguarded under Emiratization policies. The employer should notify MOHRE before terminating any UAE national.