UAE: Legal Process for Termination of Employee Due to Non-Performance

Question: I manage a team in a mainland Dubai company, and I have an employee who is underperforming. What is the legal process for terminating his employment to avoid potential wrongful termination issues?

Answer: Under UAE law, employees are expected to fulfill their job responsibilities diligently and continuously work to improve their performance. This requirement is outlined in Article 16(8) of Federal Decree Law No. 33 of 2021 on Employment Relations, which mandates that “The employee shall work diligently and constantly to develop his professional and job skills and improve his performance to the employer.”

Disciplinary Steps for Addressing Non-Performance

If an employee fails to perform as expected, the employer has the right to take disciplinary actions, which include:

• Written Attention Draw – Issuing a written reminder to address the performance issue.
• Written Warning – Issuing a formal warning if performance does not improve.
• Dismissal with Severance Pay – Termination with severance if poor performance continues.

These steps are supported by Article 39(1) of the Employment Law, allowing the employer or a representative to impose these actions as disciplinary measures.

Termination for Non-Performance Without Notice

In cases of persistent non-performance, the law allows for dismissal without notice under specific conditions. As per Article 44(4) of the Employment Law, the employer may terminate the employee after conducting a written investigation and issuing two formal warnings if the employee still fails to meet their main duties. This process requires:

• Written Investigation – The employer must conduct a documented investigation into the employee’s performance.
• Two Written Warnings – Issuing two formal warnings to notify the employee of the risk of termination.
• Written Termination Notice – If there is no improvement, a reasoned termination letter is given to the employee.

Timing and Limitations for Disciplinary Action

Employers should be aware of the timing restrictions in disciplinary cases:

• 30-Day Rule – An employer cannot discipline an employee for a violation discovered more than 30 days after it occurred.
• 60-Day Rule – Once an investigation is completed, any disciplinary action must be taken within 60 days, as stated in Article 24(4) of the Cabinet Resolution No.1 of 2022, which supports the Employment Law.
  Protection Against Arbitrary Termination

If these legal steps are not followed, the employee may file a grievance with the Ministry of Human Resources and Emiratisation, which could rule the termination as arbitrary under Article 47 of the Employment Law.

In Summary

To legally terminate an employee for non-performance in the UAE, follow these steps:

• Conduct a documented performance investigation.
• Issue two formal warnings if performance issues persist.
• If no improvement, provide a written and reasoned termination notice.

By following these legal procedures, you can terminate an employee for non-performance while minimizing the risk of a wrongful termination complaint.