What rights do you have to claim for unfair dismissal in the UAE?
Until recently, redundancies in the GCC were practically a non-existent phenomenon, which is fortunate as labour laws aren't exactly generous towards the employee. However, with the economic crisis exerting an ever tightening grip in the region, it's worth knowing what rights you have.
The concept of unfair dismissal isn't recognised by the UAE labour law, so if you believe you've been ousted unjustly, you'll struggle to receive significant compensation.
The closest thing to this is called 'arbitrary dismissal', where an employee loses their job for reasons other than an inability to perform their duties. Even then, the maximum compensation is only three months' salary.
The good news is this is being paid out with increasing regularity.
Stuart Walker, associate at law firm Afridi & Angell in Dubai, says: "There's no legal right for a redundancy payout as it's at the court's discretion. However, in the wake of the economic slowdown, the pattern at the tribunals is to awards three months' pay - the maximum allowed by law."
But Simon Adams, consultant at law firm Clyde & Co in Dubai, believes international firms generally offer more generous redundancy packages than this anyway.
"Local firms will say the law is the law and follow it to the letter. If you look at companies within the DIFC though, they're more likely to offer a redundancy package similar to the ones they give to employees in other parts of the world, which usually amounts to three months' salary" he says.
Although there are different labour laws for the UAE and the DIFC, termination of employment rights and severance pay provisions are broadly similar. However, investment bankers are more likely to make a claim - particularly at the senior level.
One employment lawyer tells us of how at the end of last year, a former head of investment banking within the DIFC, agreed a settlement with his ex-employer that ran to "millions of dollars". The dispute centred around vested stocks, which would have been paid out in the event of a redundancy, but not if the banker quit. The court had to establish why the employment was terminated.
The same firm is representing a former head of private equity at an investment house in the DIFC. So why don't we hear of more of these claims?
"At the senior level the employer and employee don't want to air their dirty laundry in public," says Adams. "They tend to deal with it in more civilised fashion. At the lower end, the legal fees often outstrip the eventual payout."
