Ask the Law: Can an employer deny end-of-service benefits if an employee is dismissed from work?

Dismissal of worker

Question: I am a business owner. What are the penalties that an employer is legally entitled to impose on a worker, according to the new UAE Labour Law? Is it possible to dismiss a worker and deprive him or her of his or her end-of-service benefits?

Answer: Firstly, according to Article 39 of the new UAE Labour Law, an employer or his or her representative may impose penalties on a worker who violates the provisions of this Decree-Law, its Implementing Regulations and resolutions issued for its implementation. The penalties can be in the form of the following:

A. Written notice;

B. Written warning;

C. Deduction of not less than five days of wages per month;

D. Suspension from work for a period not exceeding 14 days and non-payment of wage for the days of suspension;

E. Deprivation from the periodic bonus for a period not exceeding one year, regarding the establishments that adopt the periodic bonus system and the worker is entitled to obtain it according to the provisions of the employment contract or the establishment’s regulations;

F. Deprivation from promotion at establishments having a promotion system, for a period not exceeding two years;

F. Termination of service while preserving the worker’s right of end-of-service benefits.

Article 13 of the new UAE Labour Law states: ‘The employer shall provide rules regarding the organisation of work, such as the regulation of work instructions, penalties, promotions, rewards and other by-laws and regulations, according to the rules specified by the Implementing Regulation hereof.’

The employer, according to Article 14 of Cabinet Resolution No 1 of 2022 on the implementation of the new Labour Law, shall inform the worker of the regulations stipulated in this article by any available means, and shall make him or her aware thereof, in a language he or she understands.

Secondly, regarding termination, Article 42 of the new law states that the employment contract is terminated based on the wish of either party, provided that the provisions thereof regarding termination of the employment contract and the notice period as agreed upon in the contract are observed. The employer may also, under Article 44 of the same law, dismiss the worker without notice after conducting a written investigation against him or her and the dismissal decision shall be in writing and justified. The employer or its representative shall hand it over to the worker according to the conditions as specified in the same article, but none of these articles shall deprive the employee of his or her end-of-service benefits, which will be a matter to be decided upon by the court.