For Business

Redundancy

Making employees redundant is one of the hardest decisions an employer has to make.  At TWS Legal Consultants, we have been advising and representing UAE businesses on redundancy matters for over a decade.

Our multi-lingual employment lawyers will advise and support you through the redundancy process, ensuring you comply with the correct legal procedures, and your best interests are protected.

Our lawyers are registered with the UK Solicitors Regulation Authority (SRA) and the Dubai Legal Affairs Department.

What is redundancy?

Redundancy means an employee is dismissed because their role is no longer required, the employer can not sustain their employment due to economic factors, or there is a change in commercial strategy or business location; it is not due to the fault of the employee.

The is no statutory provision for redundancy in the UAE.  However, it has been previously acknowledged by the Courts that if an employer terminates an employee to save money, that dismissal may be deemed fair and valid under article 117 of the UAE Labour Law.  This article provides that an employee who has an unlimited term contract may be dismissed with a minimum of 30 days’ notice as long as the reason is reasonably valid and fair.

Do I have to make redundancy payments?

There is no legal requirement to pay redundancy payments.  However, you do have to pay standard statutory dismissal payments, as follows:

  • 30 days’ notice pay (provided the probationary period is completed)
  • if one years’ employment has been completed, an end of service gratuity
  • all accrued annual leave
  • if the employee is returning to their home country, funding for a repatriation flight
  • any other termination payments feature in the employment contract

Why is it important to seek legal advice when making employees redundant in the UAE?

As redundancy is not independently provided for under the Labour Law, it is imperative that you follow a legally defensible process if you decide to make an employee redundant.  Our employment lawyers will advise you from the beginning of the process to ensure you have evidence to prove the procedure and reasons for the redundancy were fair, and a thorough process was undertaken.  This, in turn, will ensure you can protect your interests if an employee brings a claim against you in future.

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