ANOC - Must-know penalties of UAE Labour Law

Must-know penalties of UAE Labour Law

The UAE Labour Law provides for various disciplinary measures, which as an employer and an employee one must be aware of. Here’s all you need to know about it. 

As an expat in the UAE, you need to keep yourself informed and abreast of your rights and responsibilities surrounding employment in the country. UAE’s new labour regulations effective January 1 this year ensure that employees are treated fairly, with strict enforcement encouraging businesses in the country to protect the rights of their workers.
However, there are certain cases where an employer may fine or even dismiss an employee for misconduct and breach of duties, and it is important for all employees to understand the circumstances when these penalties can be imposed.
According to Article 102 of the UAE Labour Law, there are 07 disciplinary rules that an employee should be aware of.

1. Disciplinary actionArticle 102 of the labour law states that disciplinary rules may be imposed by the employer or their representative in the following forms:

  • Warning
  • Fines
  • Suspension with reduced pay for a period not exceeding 10 days
  • Deprivation from or deferment of periodic bonus (if such bonuses are applicable in your company)
  • Deprivation from promotion
  • Dismissal from work, without affecting end-of-service gratuity
  • Dismissal from work, with total loss of end-of-service gratuity or a part of it

2. When can an employment contract be terminated?

  • If both parties agree to cancel the contract, with the employee’s consent given in writing.
  • If the contract period expires, unless it is explicitly or implicitly extended according to the law.
  • If the contract period is unspecified and any party wish to terminate it, provided they stick to the acceptable grounds and provisions surrounding contract termination (Article 113).

3. What happens in case of death or disability of the worker?
The employment contract cannot be terminated in the event of the employer’s death. However, it can be if the employee dies or is completely disabled, with approved medical certificate given by the country’s health authorities (Article 114). In case of partial disability, and the employee can continue to do tasks within their capacity, they should be retained or moved to such a job role, without any effect on their rights or compensation. 

4. What happens if the employer or employee terminate the contract before its end-date?
If the employer does it, they are to compensate the employee with an amount not more than their 3 months’ total salaries, or for the remaining period of the contract, whichever is shorter (unless the contract states different rules), according to Article 115. The same applies in vice-versa if the employee cancels the contract (Article 116). 

5. When can the employer dismiss the worker without prior notice?

  • If the employee assumes a false identity or nationality, or submits false certificates or documents
  • Within or at the end of the employee’s probation period
  • If the employee makes errors resulting in major material or financial loss to employer, and the Labour Department is informed of it within 48 hours of the incident
  • In the event of violation of safety or workplace rules, communicated in prior to the worker clearly
  • If the employee fails to perform his or her duties as stipulated in the contract, and not improve their performance in spite of warnings
  • If they reveal any confidential information regarding the company or workplace to the public
  • If they are charged with a crime of honour, honesty or public ethics by a court
  • If found under the influence of alcohol or drugs during work hours
  • If they assault the employer, manager or co-workers
  •  If they are absent without leave or valid cause for over 20 non-consecutive working days in a year, or over 7 consecutive days
    (*all under Article 120)

6. When may the employee quit work without notice?
If the employer breaches their contractual obligations made to the worker, or if they or their legal representative assault the worker (Article 121). 

​7. What are the rules on repatriation of the worker after contract termination?

  • The employer has to bear the expenses of repatriation to the location from where the employee was hired. This includes their travel ticket, and any contractual obligations on travel expenses for their family, cost of shipping of personal items etc.
  • If the termination is attributable to the worker, the latter has to be repatriated on their own expense (Article 131).
  • If company accommodation is provided, the employee has to vacate it within 30 days from date of termination, provided the employer pays the above expenses, end-of-service settlements or any other entitlements as previously agreed upon.