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Unlawful termination and discrimination under the New Labour law

March 24, 2023

Under the new labour law, party to the employment contract can terminate the agreement for a legitimate cause, provided they adhere to the notice period specified in the employment contract. This ensures that both employers and employees have the right to end the employment relationship in a lawful manner while giving the other party sufficient time to make necessary arrangements.

The new labour law has provided in article 47 two cases for unlawful termination.

1. Filing a serious criminal complaint before the ministry.
2. Filing a lawsuit against the employer that has been proven to be valid.

Initially, it seems that Article 47 specifically outlines only these two situations for unlawful termination. This differs from the previous labour law provisions, where arbitrary dismissal essentially took place when termination was due to a non-work-related cause, allowing the courts more flexibility in interpreting arbitrary dismissal cases.

Evidently, the two instances of unlawful termination stipulated in Article 47 involve an element of retaliation, narrowing the grounds for a successful unlawful termination claim compared to the previous labour law.

This interpretation of Article 47 has been confirmed in recent Court of Cassation rulings in both Abu Dhabi and Dubai. In these decisions, the court affirmed that Article 47 explicitly provides for the instances of unlawful termination. Consequently, the court dismissed unlawful termination claims that did not involve either of the circumstances specified in Article 47.

Liability of the employer for unlawful termination

To claim the compensation for unlawful termination, the employee must demonstrate that their termination aligns with one of the two scenarios specified in Article 47.
Should the court establish that an instance of unlawful termination has occurred, the employee is eligible for a monetary compensation. This compensation is capped at three months’ salary based on the Total Salary.

Alternate courses of action for employees in light of the latest developments

Previously, the language of Article 122 in the old labour law allowed the court to broadly interpret arbitrary dismissal, encompassing any termination for a reason unrelated to work. Termination is considered arbitrary if the employee’s service has been terminated on grounds, of a reasonable complaint lodged by him to the competent authorities, or on grounds of a justifiable lawsuit brought by him against the employer.

However, the new labour law lacks a similar wording to Article 122 from the old legislation. As a result, the absence of either unlawful termination scenario as prescribed in article 47 of the new Labour Law, shall not automatically grant employers the right to terminate employees unilaterally. Employers must still comply with the labour law provisions regarding termination with or without notice.

Non-compliance with article 44

Article 44 of the labour law outlines the conditions under which an employer may dismiss an employee without notice, following a written investigation and the issuance of a justified written decision for dismissal.

Although failure to comply with Article 44 does not qualify as unlawful termination as defined in Article 47, yet the employer may still be held liable for compensating the employee due to non-compliance with the dismissal conditions set forth in Article 44. This liability is established based on the general provisions of civil law.

To successfully claim such damages, the employee must demonstrate the losses incurred as a result of the breach of Article 44. There is no predetermined cap for compensation in this situation, as the amount awarded to the employee depends on the extent of the losses sustained as a result of such breach.

Discrimination grounds

Article 4 imposes an obligation on employers to ensure equality and non-discrimination in the workplace based on race, colour, gender, religion, national origin, social origin, or disability. This responsibility includes both job assignment and maintaining job continuity for employees.

Non-compliance with this obligation does not fall within the scope of unlawful termination as defined in article 47 of the Labour law. However, the employer may still be held liable for compensating the employee due to a breach of the non-discrimination obligation outlined in Article 4 of the Labour Law.

In such cases, it is likely that the employee’s claim would be pursued under civil law provisions. To successfully claim damages from the employer, the employee must demonstrate the losses incurred because of that breach.

As of now, there are no known case precedents addressing these issues under the new labour law.

Statute of limitations

Under the new labor law, it is specified that labor disputes arising from employment contracts or due to labor law provisions will not be accepted by the labor court if one year has elapsed since the date of termination or dismissal, as applicable.

Filing a labor lawsuit after the one-year period has passed will result in the dismissal of the case, unless the employee can prove that the statute of limitations period was suspended for a valid reason.


As the labor law in the UAE is still relatively new and evolving, there is a degree of uncertainty surrounding how courts will interpret and apply various provisions. As more cases are brought before the courts, legal precedents will be established, providing greater clarity on the interpretation of the law.

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