UAE: Can an employee ask for 3-month compensation in case of termination?

A reader wants to know if they can add a clause to their contract about compensation in the case of firing.

Question: I am considering a job offer from a Dubai-based mainland company. Are job contracts standard here, or can employees negotiate terms? If I want a clause added about paying a three-month compensation in case I get fired, can I negotiate and get it added?

Answer: Pursuant to your queries, the provisions of Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations, Cabinet Resolution No. 1 of 2022 on the Implementation of Federal Decree Law No. 33 of 2021 Regarding the Regulations of Employment Relations and Ministerial Decree No. 46 of 2022 Regarding Work Permit, Job Offers and Employment Contracts Forms are applicable.

An employer and an employee should enter into an employment contract for an employee to be employed in the UAE. This is in accordance with Article 8 of the Employment Law read with Article 10 of the Cabinet Resolution No. 1 of 2022.

In the UAE, an employer and an employee may agree to include additional terms and conditions in an employment contract that, are not contradictory to the provisions of the Employment Law and its subsequent ministerial resolutions. This is in accordance with Article 10(2) of the Cabinet Resolution No. 1 of 2022, which states,

“The employee and the employer may agree to introduce new clauses to the approved contract forms, provided that they are in agreement with the provisions of the Decree-Law, this Resolution and the Legal Regulations.”

Furthermore, an employment contract needs to be in the prescribed standard format approved by the Ministry of Human Resources and Emiratisation. This is in accordance with Article 1 of the Ministerial Decree No. 46 of 2022, which states,

“Pursuant to the text of Article No. 10 of the Execution Regulations of the Decree No. 33 of 2021, the contract between the employer and the employee is concluded in accordance with the standard employment offers and contract approved by the Ministry and listed on its website.”

In addition, an employment contract may include additional clauses which are more beneficial to employees. This is in accordance with Article 2 (1) of the Ministerial Decree No. 46 of 2022, which states,

“Pursuant to the provisions of the Decree-Law and its Executive Regulations, an employer who wishes to employ any employee must abide by the following:

Utilize the approved standard employment contract that confirms the job offer when requesting the issuance of a work permit. It is permissible to add more benefits to the employee in the contract than those mentioned in the job offer. It is also permissible to add annexes to the contract provided that it does not conflict with the provisions of the decree-law and its executive regulations.”

Based on the aforementioned provisions of law, you may request your prospective employer to include an additional clause in your employment contract which states that in the event of termination of the employment by your prospective employer, you will be entitled to three months' salary as compensatory pay. If your prospective employer does not agree to include the three months’ salary as compensation and if you are terminated without a valid reason, you may claim compensation of up to three months' salary for arbitrary dismissal. This is in accordance with Article 47 of the Employment Law.

News Source: Khaleej Times