UAE Labour Law sets out specific procedures for disciplining employees. Failure to follow the correct process can render a termination unlawful and expose employers to compensation claims. Here is what every UAE employer must know.
Disciplinary Actions Under UAE Labour Law
Federal Decree-Law No. 33 of 2021 permits the following disciplinary actions (in order of severity): 1. Written warning: Formal notice of the breach and expected improvement. 2. Fine deduction from salary: Maximum deduction of 5 days’ wages per single disciplinary action. 3. Suspension without pay: Maximum 14 days per calendar year. 4. Withholding scheduled promotion. 5. Termination WITH end-of-service gratuity: Termination that is not for gross misconduct — employer still pays gratuity. 6. Termination WITHOUT gratuity (for gross misconduct only): Only applicable in specific situations listed in the law.
Grounds for Termination Without Gratuity (Gross Misconduct)
UAE Labour Law exhaustively lists the grounds for terminating without gratuity. Key examples: the employee provided false identity documents or forged certificates at time of hire, the employee caused serious financial loss to the employer through negligence or deliberate act, the employee disclosed the employer’s trade secrets to a competitor, the employee was found to be intoxicated or under the influence of narcotics during working hours, and the employee physically assaulted the employer, a manager, or a colleague during work. Note: “poor performance” alone does NOT constitute gross misconduct — employers must follow a documented performance improvement process before terminating a poor performer.
The Required Disciplinary Process
Before taking any disciplinary action: issue a written notice informing the employee of the allegation, allow the employee to respond within a reasonable period (typically 5 working days), document the response and your findings, and then apply the appropriate disciplinary action documented in writing. Keep all disciplinary records for a minimum of 2 years — MOHRE may request them in the event of a labour complaint.