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Employment disputes in the UAE have increased significantly since the sweeping reforms introduced by Federal Decree-Law No. 33 of 2021. Whether you have been dismissed without cause, denied end-of-service gratuity, or subjected to unpaid wages, UAE law provides clear remedies through the Ministry of Human Resources & Emiratisation (MOHRE) and the specialised Labour Courts. This guide explains the full legal framework, the step-by-step complaints process, and what both employees and employers need to know in 2026.
1. UAE Labour Law Framework
Federal Decree-Law No. 33 of 2021 (the New Labour Law)
The primary legislation governing private-sector employment in mainland UAE is Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (FDL 33/2021), which came into force on 2 February 2022 and replaced the long-standing Federal Law No. 8 of 1980. Its implementing regulations are set out in Cabinet Resolution No. 1 of 2022. Key reforms include:
- Mandatory fixed-term contracts (maximum two years, renewable) for all employees — unlimited-term contracts were phased out, with existing unlimited contracts converted by 2 February 2023.
- Expanded grounds for legitimate termination and strengthened protections against arbitrary dismissal (Art. 47).
- Enhanced maternity, paternity, and parental leave entitlements.
- Introduced part-time, temporary, and flexible working models.
- Prohibition on salary discrimination based on gender, race, religion, or nationality.
- Mandatory wage protection under the Wage Protection System (WPS).
The law applies to all employers and employees working in the UAE mainland (onshore), regardless of nationality, unless a specific exemption applies (e.g., domestic workers are governed separately by Federal Law No. 10 of 2017).
DIFC Employment Law
Employees working within the Dubai International Financial Centre (DIFC) are governed by the DIFC Employment Law (DIFC Law No. 2 of 2019), as amended. This is a standalone common-law-influenced employment regime administered by the DIFC Courts. Key differences from mainland law include: a defined unfair dismissal framework, a 30-day internal grievance requirement before litigation in many cases, and compensation calculated differently from the FDL 33/2021 formula. DIFC employees must file employment claims before the DIFC Courts Small Claims Tribunal (claims up to USD 200,000) or the DIFC Courts Court of First Instance for larger claims.
ADGM Employment Regulations
Employees in the Abu Dhabi Global Market (ADGM) fall under the ADGM Employment Regulations 2019 (as amended). These regulations are broadly modelled on English employment law and are administered by the ADGM Courts. They provide for unfair dismissal claims, redundancy entitlements, and whistleblower protections. ADGM employees and employers should note that FDL 33/2021 does not apply within the ADGM, and the ADGM Registration Authority is the relevant supervisory authority.
2. Wrongful & Arbitrary Dismissal
What Constitutes Arbitrary Dismissal
Under Article 47 of FDL 33/2021, a dismissal is considered arbitrary if it is not related to the work, has no legitimate business reason, or is motivated by discriminatory or retaliatory grounds. Classic examples of arbitrary dismissal recognised by UAE Labour Courts include:
- Termination because the employee filed a complaint with MOHRE or the Labour Court.
- Dismissal connected to the employee's gender, pregnancy, religion, nationality, or exercise of a legal right.
- Termination without any genuine operational, performance, or disciplinary justification.
- Constructive dismissal — where an employer makes the working environment intolerable, effectively forcing the employee to resign.
The burden of proving that dismissal was lawful rests primarily on the employer. If the employer cannot demonstrate a legitimate, work-related ground, the Labour Court will treat the dismissal as arbitrary.
Compensation for Arbitrary Dismissal
Article 47(2) provides that an employee who is arbitrarily dismissed is entitled to compensation determined by the court based on:
- The nature of the work and the harm suffered.
- The duration of service.
- The circumstances of the dismissal.
In practice, courts have consistently awarded up to three months' gross salary per year of service, subject to the court's discretion and the overall cap on compensation. This compensation is in addition to — not instead of — notice pay, end-of-service gratuity, and any other outstanding entitlements.
Notice Period Entitlements
Under Article 43 of FDL 33/2021, the minimum statutory notice periods are:
- Less than 6 months' service: 1 month's notice.
- 6 months to 5 years' service: 1 month's notice.
- More than 5 years' service: 2 months' notice.
- More than 10 years' service: 3 months' notice.
Parties may contractually agree to a longer notice period, but they cannot agree to a shorter one. If the employer terminates without giving notice, the employee is entitled to pay in lieu of notice at their full basic salary rate. If the employee leaves without giving notice, the employer may deduct the equivalent sum from any monies owed, or pursue a claim for the shortfall.
End-of-Service Gratuity Calculation
Every employee who completes at least one full year of continuous service is entitled to an end-of-service gratuity (EOSG) under Article 51 of FDL 33/2021, calculated as follows:
- First 5 years of service: 21 calendar days' basic salary per year of service.
- Beyond 5 years: 30 calendar days' basic salary per year of service (for the portion exceeding 5 years).
The daily rate is calculated as: monthly basic salary ÷ 30. The EOSG is calculated on basic salary only — allowances (housing, transport, etc.) are excluded. An employee who resigns after completing between 1 and 3 years receives one-third of the full gratuity. After 3 to 5 years, they receive two-thirds. After 5 or more full years, the full gratuity is payable regardless of whether the employee resigned or was terminated. An employee dismissed for gross misconduct under Article 44 forfeits the right to gratuity entirely.
3. Other Claimable Entitlements
Unpaid Wages
All wages must be paid through the Wage Protection System (WPS) within the agreed pay cycle (typically monthly). Failure to pay wages for more than one month constitutes a serious violation and entitles the employee to file an immediate MOHRE complaint. Outstanding wages carry no limitation bar within MOHRE proceedings, though Court claims must generally be filed within 2 years of the right arising (Article 54 FDL 33/2021 — limitation period).
Overtime Pay
Article 19 of FDL 33/2021 governs overtime. The normal working day is 8 hours (9 hours for certain sectors). Overtime is compensated at:
- 125% of the basic hourly rate for regular overtime hours.
- 150% of the basic hourly rate for work performed between 21:00 and 04:00.
- Friday (or weekly rest day) work: compensated by a substitute rest day plus 150% of basic hourly rate if no substitute rest day is given.
Maximum daily overtime is 2 hours. Employees can claim all unpaid overtime within the two-year limitation period.
Annual Leave Encashment
Under Article 29, employees are entitled to a minimum of 30 calendar days annual leave per year after completing one year of service (pro-rated for partial years). If unused leave accrues at termination, the employer must pay the cash equivalent at the basic salary rate. Employees cannot be required to waive accrued leave entitlements.
Repatriation Air Ticket
Article 53 provides that upon termination of employment — unless the employee is immediately joining another employer — the employer must bear the cost of repatriation to the employee's home country. If the employer fails to do so, this forms part of the financial claim before MOHRE or the Labour Court.
Maternity Pay
Maternity leave under Article 30 is 60 calendar days: the first 45 days at full pay and the following 15 days at half pay. Female employees who are dismissed during pregnancy or on maternity leave have a strong arbitrary dismissal claim, and the dismissal may be void ab initio.
Commission Disputes
Agreed commissions, bonuses tied to performance, and incentive payments form part of the "wage" if they are a regular and guaranteed component of remuneration. Courts will look at the terms of the employment contract and documented practice. Where commissions are earned but unpaid at termination, they are fully claimable alongside other entitlements.
Gratuity on Resignation
As noted above, an employee who resigns voluntarily is entitled to gratuity on the following scale: one-third after 1–3 years; two-thirds after 3–5 years; full gratuity after 5 or more years. This represents a significant improvement over the pre-2022 regime and removes the historical disincentive to resign early in employment.
4. MOHRE Complaint Process
Who Can File
Any employee (or former employee) in the UAE mainland private sector can file a complaint with MOHRE. The process is available regardless of the employee's visa status at the time of filing, though the employee must have held a valid employment relationship in the UAE. Complaints relating to domestic workers fall under a separate MOHRE domestic workers team.
How to File
Complaints can be submitted through any of the following channels — all free of charge for employees:
- MOHRE Smart App (iOS and Android) — the fastest and most widely used channel.
- MOHRE website — mohre.gov.ae, under "Services → Labour Relations → File a Complaint".
- Tawasul platform (for certain complaint types).
- In person at any MOHRE Customer Happiness Centre.
- Call centre: 800-60.
There is no filing fee for employees. Documents to attach include: a copy of the Emirates ID or passport, the employment contract, payslips, any termination letter, and relevant correspondence.
MOHRE Mediation
Once a complaint is registered, MOHRE assigns a labour inspector or conciliator who will contact both parties. Under Article 54 of FDL 33/2021 and Cabinet Resolution No. 1 of 2022, MOHRE must attempt to mediate the dispute within 14 working days (approximately three calendar weeks). In practice, initial contact typically occurs within 5–10 working days. During this period, both parties attend one or more conciliation sessions (which can be conducted via video call). If the employer fails to attend or engage, MOHRE will note this and may escalate faster.
Outcomes of MOHRE Mediation
- Settlement reached: MOHRE records the agreement, which becomes binding. The employer is given a deadline (usually 7–14 days) to pay. Failure to pay allows the employee to enforce the agreement through the courts.
- No settlement within 30 days: MOHRE issues a referral letter allowing the employee to file the case before the competent Labour Court. This referral is a prerequisite for court proceedings — employees generally cannot file directly in the Labour Court without a prior MOHRE referral.
Importantly, during the MOHRE mediation period, the employee's residency visa is typically protected from cancellation by the employer — a significant protection preventing retaliatory visa cancellation during the complaint process.
5. UAE Labour Court Process
Jurisdiction and Where to File
After receiving the MOHRE referral letter, the employee files the claim in the Labour Court division of the Court of First Instance in the emirate where the employer's principal place of business is located (or where the employment was primarily performed). Each emirate has its own first-instance court: Dubai Courts, Abu Dhabi Judicial Department, Sharjah Courts, etc. All operate under the Federal Labour Law framework for mainland employees.
Legal Fees and Representation
One of the most employee-friendly aspects of the UAE system is that employees pay no court filing fees for labour claims (Article 54(6) FDL 33/2021). Lawyers' fees are the employee's own expense, though legal aid may be available in limited circumstances through the relevant emirate's Legal Aid Authority. Employers do pay filing fees. Parties may appear without a lawyer, though legal representation significantly improves claim management, especially for complex disputes involving multiple heads of claim.
Documents Required
- MOHRE referral/escalation letter.
- Copy of passport and Emirates ID (or expired Emirates ID with passport).
- Employment contract (original Arabic version if available, or a notarised translation).
- Payslips and bank statements evidencing salary deposits.
- Termination letter or any correspondence regarding dismissal.
- Evidence of specific claims: overtime records, leave schedules, commission letters, etc.
- Statement of claim (prepared by the employee or their lawyer) specifying each head of claim and the amount sought.
Timelines
Labour court timelines vary by emirate and the complexity of the claim, but the following general guide applies for 2026:
- Straightforward single-employee claim: 60–120 days from filing to first-instance judgment.
- Contested claim with multiple heads or expert evidence: 3–6 months.
- Complex multi-party or high-value claim: 6–12 months or more.
The court will typically schedule 2–4 hearings before issuing judgment. In Dubai, the Labour Court has made significant use of the Smart Judge system to streamline document submission and reduce hearing times.
Appeal
A first-instance Labour Court judgment can be appealed to the Court of Appeal within 30 days of the judgment being served. A further cassation appeal to the Court of Cassation (or Federal Supreme Court, depending on the emirate) is available on points of law, typically within 30 days of the Court of Appeal judgment. Enforcement of judgments — including attachment of the employer's bank accounts — is handled by the Execution Court.
6. Employer Perspective
Lawful Grounds for Termination
Employers may lawfully terminate an employee's contract on the following grounds under FDL 33/2021:
- Expiry of contract — non-renewal of a fixed-term contract at its natural expiry date.
- Mutual agreement — documented in writing, signed by both parties.
- Business reasons — genuine operational, economic, or structural reasons (redundancy), provided proper process is followed.
- Performance grounds — failure to meet documented performance standards, following a performance improvement process.
- Gross misconduct — Article 44 lists specific acts (e.g., assault, fraud, serious breach of confidentiality, three or more unjustified absences in 30 days) that justify summary dismissal without notice or gratuity.
Disciplinary Process Requirements
For performance or conduct-related terminations that fall short of gross misconduct, employers should maintain a documented disciplinary process:
- Issue written warnings with an opportunity for the employee to respond.
- Document all performance management steps.
- Hold a formal meeting before termination, giving the employee a chance to present their case.
- Record the reasons for termination in writing in the termination letter.
Failure to follow a fair process, even where genuine grounds exist, increases the risk of an arbitrary dismissal finding and can affect the quantum of any award.
Notice Pay and Final Settlement Calculation
On termination, the employer must pay the employee a final settlement within 14 days of the last working day (Article 53). The settlement must include: all outstanding salary, pro-rated annual leave, notice pay (or pay in lieu), end-of-service gratuity, repatriation ticket (where applicable), and any agreed commission or bonus earned but unpaid. Late payment of the final settlement attracts a penalty of 5% per month of the unpaid sum under Cabinet Resolution No. 1 of 2022.
Protecting Against Claims
Best practices to minimise exposure to employment claims include:
- Maintain clear, up-to-date employment contracts in Arabic (the operative language) with accurate salary and role descriptions.
- Implement a compliant HR policy manual covering disciplinary procedures, leave, and grievances.
- Ensure WPS compliance — all salary payments routed through approved banks on time.
- Document all performance management and disciplinary steps contemporaneously.
- Conduct exit interviews and obtain signed full-and-final settlement receipts.
- Take specialist legal advice before terminating any employee who is pregnant, on sick leave, has filed a complaint, or has more than 5 years' service (given higher gratuity liability).
7. Non-Competition Clauses
Legal Basis and Enforceability
Non-competition (non-compete) clauses are governed by Article 10 of FDL 33/2021. A valid non-compete clause must satisfy the following requirements to be enforceable:
- The employee must occupy a position that gives access to clients, trade secrets, or commercially sensitive information.
- The restriction must be limited in time — maximum 2 years from the date of termination.
- The restriction must be limited in geographic scope — it must specify the territory in which competition is restricted; a blanket worldwide restriction is unlikely to be upheld.
- The restriction must be limited in scope of activity — it must identify the type of business or role that is restricted.
Courts will strike down or narrow overly broad non-compete clauses. Where a clause is held enforceable, the remedy for breach is typically damages, not an injunction compelling the employee to leave their new job (though interim injunctive relief has been granted in exceptional circumstances before the DIFC and ADGM Courts).
Practical Considerations
An employer seeking to enforce a non-compete clause must show: (i) it had a legitimate protectable interest; (ii) the restriction was proportionate; and (iii) the employee's new role actually falls within the restricted scope. Employees who believe they are bound by an unenforceable or overly wide non-compete should seek legal advice before accepting a new position, as even an unenforceable clause can deter prospective employers during any dispute period.
8. Employee & Employer Checklist
Employee Checklist — If You Have Been Dismissed
- Secure copies of your employment contract, payslips, and any written correspondence before you lose access to company systems.
- Obtain a copy of your termination letter (if one was issued) — request it in writing if not provided.
- Check whether your employer has paid all accrued salary, leave, and benefits within 14 days of your last day.
- Calculate your end-of-service gratuity using the statutory formula and compare it to what you were paid.
- Note the date of termination — the 2-year limitation period for Labour Court claims begins from this date.
- File a MOHRE complaint promptly if any amounts are unpaid or if you believe the dismissal was arbitrary.
- Obtain the MOHRE referral letter before filing in the Labour Court.
- Consult a UAE-qualified employment lawyer if the claim is complex or the amounts are significant.
Employer Checklist — Before Terminating an Employee
- Confirm there is a documented, legitimate ground for termination linked to conduct, performance, or a genuine business reason.
- Ensure all prior warnings and performance management steps are in writing and have been acknowledged by the employee.
- Calculate the employee's full entitlement (notice, gratuity, leave, outstanding salary) before issuing the termination letter.
- Do not terminate an employee who is pregnant, on certified sick leave of more than 90 days, or who has filed an active MOHRE complaint without taking legal advice first.
- Provide the termination letter in writing and state the reason for termination.
- Pay the final settlement within 14 days of the last working day to avoid the 5% monthly penalty.
- Obtain a signed full-and-final settlement receipt that itemises all amounts paid.
- Review any non-compete clause before relying on it — confirm it meets the Article 10 requirements.
9. Legal Advice
When to Seek Legal Advice
While MOHRE's free mediation service resolves many straightforward disputes, there are circumstances where instructing a qualified UAE employment lawyer before or during the process can make a material difference to the outcome:
- High-value claims — where gratuity, commission, or arbitrary dismissal compensation exceeds AED 50,000, the investment in legal advice is almost always justified by the improvement in outcome.
- Complex fact patterns — constructive dismissal, whistleblower retaliation, or mass redundancy situations require careful legal framing from the outset.
- DIFC and ADGM employees — these regimes have separate procedures and limitation periods; MOHRE has no jurisdiction and errors in filing jurisdiction can be costly.
- Employer defence — employers facing claims before the Labour Court or responding to MOHRE complaints should have legal representation to protect against inflated or misconceived claims and to manage cross-claims.
- Non-compete enforcement or avoidance — both seeking an injunction and challenging the validity of a non-compete clause require specialist advice.
- Appeals — the 30-day appeal window is strict; do not allow it to lapse before seeking advice on the merits of an appeal.
The team at Al Maazmi Lawyers advises both employees and employers on all aspects of UAE employment disputes, from MOHRE complaint strategy through to Labour Court litigation and appeal. Contact us for a confidential consultation.
10. Frequently Asked Questions
Can my employer terminate me without notice in UAE?
Yes, but only in limited circumstances. Under Article 44 of FDL 33/2021, an employer may terminate an employee summarily — without notice and without end-of-service gratuity — only where the employee has committed one of the specific acts of gross misconduct listed in the article. These include: assault on the employer, manager, or colleagues; serious breach of confidentiality; causing substantial financial loss to the employer through deliberate act or gross negligence; providing forged documents to obtain employment; being absent without reasonable cause for more than 7 consecutive days or 20 non-consecutive days in a single year; and similar serious acts. Outside these specific circumstances, the employer must give the contractual or statutory minimum notice (ranging from 1 to 3 months depending on service length) or pay wages in lieu. Termination without notice on grounds other than those listed in Article 44 is treated as arbitrary dismissal, entitling the employee to compensation of up to 3 months' salary per year of service in addition to notice pay.
How is end-of-service gratuity calculated in UAE?
End-of-service gratuity (EOSG) is governed by Article 51 of FDL 33/2021 and is calculated on the employee's last basic salary (excluding allowances). The formula is: 21 calendar days' basic salary for each year of the first 5 years of service, and 30 calendar days' basic salary for each year beyond 5 years. The daily rate is calculated as the monthly basic salary divided by 30. For example, an employee with 7 years of service and a monthly basic salary of AED 10,000 would receive: (5 years × 21 days × AED 333.33/day) = AED 35,000, plus (2 years × 30 days × AED 333.33/day) = AED 20,000, for a total EOSG of AED 55,000. Employees who resign are entitled to the full gratuity after 5 or more years, two-thirds after 3–5 years, and one-third after 1–3 years. Employees dismissed for gross misconduct under Article 44 forfeit their gratuity entitlement entirely.
What is the MOHRE complaint process and how long does it take?
The MOHRE complaint process is the mandatory first step before accessing the UAE Labour Court for most mainland private-sector employees. It is entirely free for employees. You file your complaint via the MOHRE Smart App, the mohre.gov.ae website, or in person at any MOHRE Customer Happiness Centre, attaching your employment contract, Emirates ID, payslips, and termination letter. MOHRE then contacts both parties and attempts to mediate the dispute within 14 working days. If mediation is successful, the agreement is recorded and binding. If no settlement is reached within 30 calendar days of the complaint being filed, MOHRE issues a referral letter entitling the employee to file directly in the Labour Court at no cost. From complaint to referral, the total MOHRE phase typically takes 3–6 weeks. The entire process from MOHRE filing to a first-instance Labour Court judgment for a straightforward claim is commonly 3–5 months in total, though more complex or contested matters can take 6–12 months or longer.
Can I claim for arbitrary dismissal if I resigned under pressure?
Yes — if your resignation was involuntary and the employer's conduct made continued employment untenable, UAE Labour Courts will treat this as constructive dismissal, which is recognised as a form of arbitrary dismissal under Article 47 of FDL 33/2021. Common scenarios include: the employer unilaterally reducing your salary or demoting you without justification; refusing to pay wages for more than one month; subjecting you to harassment or hostile working conditions designed to force your departure; or issuing threats of termination that induced your resignation. The burden is on the employee to demonstrate that the employer's conduct — not a personal choice to leave — caused the resignation. Courts consider contemporaneous documentary evidence (emails, messages, MOHRE complaints filed before resignation) highly persuasive. It is important not to resign without first documenting the employer's conduct and, if possible, filing a MOHRE complaint or obtaining legal advice before submitting any resignation letter, as the wording of that letter will be closely scrutinised.
Does UAE Labour Law apply to DIFC and ADGM employees?
No. Federal Decree-Law No. 33 of 2021 (the UAE mainland Labour Law) does not apply to employees whose contracts of employment are governed by the laws of the DIFC or the ADGM. The DIFC is governed by DIFC Law No. 2 of 2019 (DIFC Employment Law), and disputes are resolved before the DIFC Courts (Small Claims Tribunal for claims up to USD 200,000, or the Court of First Instance for higher-value matters). The ADGM is governed by the ADGM Employment Regulations 2019, and disputes are heard by the ADGM Courts. Both regimes have their own rules on unfair dismissal, redundancy, and limitation periods, which differ materially from the mainland framework. MOHRE has no jurisdiction over DIFC or ADGM employment relationships, and filing a MOHRE complaint instead of proceeding before the correct court can result in losing time-sensitive rights. If you are unsure whether your employment is governed by mainland, DIFC, or ADGM law, check your employment contract's governing law and jurisdiction clause, and seek specialist advice promptly.
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Published 4 June 2026. General information only — not legal advice. Contact us for matter-specific advice.