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23 July 2024

Violation of labour laws permitted only if it benefits employees: Dubai Court

By Mohammed Al Sadafy

The terms of the UAE’s labour law are binding on all employers who cannot violate them except in favour of employees, according to a new principle established by the Dubai Court of Cassation.

Based on this principle, the court issued a verdict in the favour of an employee by granting him salary for three months after he was terminated because his job contract stipulated a notice period of three months.

A deputy head of an investment and development company had opened a lawsuit against his employer, seeking about Dh480,000 as his dues, after he was sacked just eight months into the job.

In his plea, he said his monthly salary was Dh45,000.

He sought compensation of one month’s unpaid salary plus Dh135,000 as  salary for the notice period of three months and another Dh135,000 for unfair termination.

He also sought Dh12,000 vacation allowance and Dh149,000 as salary from the time of termination until filing of the lawsuit.

The Court of First Instance ordered the employer to pay the former employee Dh102,000 - one month’s unpaid salary (Dh45,000) plus one month’s salary (Dh45,000) for unfair dismissal and Dh12,000 as vacation allowance.

Both the parties did not accept the verdict and went in appeal.

The Court of Appeal passed a verdict increasing the employee’s compensation to Dh237,000, adding three months’ notice period salary of Dh135,000 as per terms of the job contract.

The company moved the higher court and appealled at the Court of Cassation, saying that it had given the employee a notice period of one month after which the employee had submitted his resignation and stopped coming to work.

The Court of Cassation rejected this argument, ruling that the employer had sacked the employee in violation of the notice period clause of the job contract.

The company is obliged to compensate the employee with one month’s salary or as per the terms of the job contract, whichever is more beneficial to the employee.

In this case, since the job contract mentioned three months’ notice on either side, the company has to pay three months’ salary as compensation, the Court of Cassation ruled.