This article was written by partner Vandana Rupani and senior associate Hani Ghattas of Fulbright & Jaworski LLP.
A UAE employer hiring Emirati employees in the private sector should be aware that if the employment relationship with an Emirati employee does not progress as expected, it cannot simply terminate the employment of an Emirati employee unilaterally under the UAE Labor Law as is the case with other employees. Rather, pursuant to UAE Ministry of Labor Ministerial Resolution No. 176 of 2009, termination of the employment of an Emirati employee requires meeting certain conditions, including following the directions of the UAE Federal Ministry of Labor (the “Ministry”).
UAE Ministry of Labor Ministerial Resolution No. 176 of 2009 (the “Resolution”)
Under the Resolution, termination of the employment of an Emirati employee is considered to be for an “illegitimate reason” if any of the following conditions exist:
- Termination is not pursuant to Article 120 of the UAE Labor Law (which article sets forth certain categories of “for cause” termination).
- The employer is retaining a non-Emirati employee carrying out the same job.
- Where 30 days’ prior notice of the termination is not provided to the Ministry or the employer does not follow the instructions of the Ministry with regard thereto.
- The Emirati employee is not paid all of his end-of-service benefits and other legal and contractual entitlements.
Where the Ministry determines termination of the employment of an Emirati employee is for an illegitimate reason, it will give notice to the employer, and the employer will have 15 days to settle the dispute with the Emirati employee. If the parties are unable to settle the dispute in that time, the Ministry will refer the matter to the UAE courts. In the case of such referral, the Ministry will not permit the processing of any new labor permits relating to the employer until a final determination in the dispute is rendered by such courts.
In our discussions with officials at the Ministry, they appeared to take a less strict and more flexible approach to implementing the Resolution and indicated that an employer should submit their reasons for wanting to terminate the employment of an Emirati employee and the Ministry will consider each request on a case-by-case basis taking into consideration the overall facts and circumstances.
In any case, given the foregoing conditions and repercussions, an employer should carefully consider the basis upon which it decides to terminate the employment of an Emirati employee. In this regard, it would be advisable for an employer to keep adequate records and supporting documentation and relevant correspondence in the event that it is needed to be able to demonstrate to the Ministry that its actions and decision to terminate was not for an illegitimate reason.