A recent judgment of the Abu Dhabi Family, Civil and Administrative Claims Court provides a timely reminder to employers operating in the UAE of the importance of having clear disciplinary policies in place and adhering to them carefully prior to terminating an employee’s employment.
Former Employee Alleges Financial and Other Harms
The case arose from a claim brought by a former employee alleging that the wording of his termination letter had caused reputational, financial and psychological harm and seeking compensation of AED 120,000. The employee argued that the letter accused him of “gross misconduct” and “serious violation of company policy” and that these allegations were later undermined when the employer amended the termination letter following the involvement of the Ministry of Human Resources and Emiratisation.
The court ultimately dismissed the employee’s claim in its entirety, finding that there was no legal basis for awarding damages. In doing so, the court placed significant weight on the fact that the employee had agreed to the employer’s internal investigation procedures and subsequently entered into an amicable settlement. On the evidence before it, the court concluded that the employer had not acted with fault in a manner that would give rise to liability.
Considerations for the Disciplinary Process
While the employer was successful in this instance, the judgment underscores several important lessons for employers.
First, employers should ensure that they have a clear and well-documented disciplinary policy in place that complies with UAE Federal Decree-Law No. 33 of 2021, as amended (the UAE Labour Law). Such policies should set out the steps to be followed when investigating alleged misconduct, including notice to the employee, the opportunity to respond, and the proportional application of disciplinary sanctions. Courts in the UAE will look closely at whether an employer has followed its own procedures and whether the employee was afforded due process.
Second, the decision highlights the importance of consistency between the disciplinary process followed and the reasons relied upon for termination. Employers must take care to ensure that the grounds stated in a termination letter accurately reflect the outcome of the investigation and the disciplinary steps taken beforehand. Recording allegations or conclusions in a termination letter that are not properly supported by the process followed can expose an employer to unnecessary risk, even if the termination itself is ultimately lawful.
Finally, the case serves as a reminder that termination letters are not merely administrative documents. Their wording can have legal consequences, particularly where allegations of misconduct are involved. Employers should carefully consider how termination reasons are framed and where appropriate seek legal advice before issuing termination correspondence.
In an environment where employment disputes are increasingly scrutinised, this judgment reinforces the value of robust disciplinary frameworks and careful documentation. Employers who invest the time in adopting these fundamentals will be better placed to defend claims and minimise exposure under the UAE Labour Law.