Wednesday, February 23, 2011

Sacked without reason? ‘Redundancy’ not valid reason for dismissal: legal experts

Many employees in the UAE, especially when the economic crisis started eating into the profits of businesses in the country, were faced with a similar problem – sacked one day without any clue about what to do next.
Emirates 24 / 7 spoke with legal and employment experts on what an employee can do in such a situation.

In one of its employment bulletins, Clyde & Co highlights the rights of the employees upon termination (employment relations in the Dubai International Financial Centre other free zones in the UAE have their own rules).
The bulletin elaborates on the grounds when an employee can consider his dismissal as unfair. “Under the Labour Law, an employee will be deemed to have been arbitrarily dismissed if he was dismissed for a reason unconnected to the work. This implies that an employee may only be dismissed on grounds of performance or misconduct.”
“The concept of ‘redundancy’ is not recognised in the UAE and, therefore, strictly speaking is not a valid reason for dismissal under the Labour Law. However, the UAE Labour Courts have recognised the employer’s right to restructure their business,” it mentions.
“If the dismissal was unfair and the employee hasn't been paid his entitlements, then the employee should seek recourse through the Ministry of Labour's complaints process and the Labour courts, who, will take complaints seriously and rule in favour of an employee if he or she has been treated unfairly and unlawfully,” Sara Khoja Senior Associate, Employment and Incentives Group at Clyde & Co LLP, told this website.
According to Samir Kantaria, Partner, Head of Employment at Al Tamimi & Company, “If an employee has been dismissed for no clear reason then, depending on where he is employed (onshore UAE or free zones), he can file a complaint for arbitrary dismissal with the relevant authority (Ministry of Labour for onshore employees and the free zone authority for others). This would not apply in the DIFC which operates under a separate employment law. If the ministry or the free-zone are not able to settle the matter, it is likely that they will refer the matter to the courts for determination. If an employee has been found to be arbitrary dismissed, the law provides that he may be awarded up to a maximum of three month salary as compensation. Arbitrary dismissal is seen as a termination that is not related to performance.”
“It depends on the case: if someone has been fired on valid reason (for instance, low performance from his side, or financial problems of the company that needs to proceed to lay-offs, or mismanagement/fraud from his side, or abortion of the project he is working on etc), then there is nothing much to fight about," argues Konstantina Sakellariou, Partner, Marketing & Operations Director at Stanton Chase.
"Of course, if being laid off is part of an unfair internal process, based on internal politics, discrimination etc, then one may wish to fight back. In this case, the results may be ambiguous, still one may wish to fight back and ask the support of the legal system in the UAE and the respective authorities. Finally, one reason to fight about is to secure one’s rights when fired (if they are at risk and the company is not fulfilling its obligations based on the UAE law and the contractual agreement),” she adds.
Law of process
For those who have been given the pink slip may wish to look what all the Labour Law states. According to Clyde & Co, it contains an exhaustive list of circumstances in which the employer can dismiss an employee without notice (regardless of the type of contract in place). In all other circumstances the employee will be entitled to receive notice upon the termination of his employment.
If the employee thinks he has been treated unfairly then he/she has one-year from the alleged breach taking place, or the entitlement falling due, to raise a complaint. Thereafter his claim will be time barred, the law firm says.
“An employee must first complain to the Ministry of Labour or the relevant free zone authority (the Labour Department). The Labour Department will attempt to reach an amicable resolution, failing which the matter will be referred to the Labour Court.
“Proceedings in the Labour Court can be time consuming and it can take months to obtain an outcome (which parties often appeal). The Labour Courts are very stringent about the requirement for clear documentary evidence of a party’s case and no oral witness evidence will be considered.
“There is no formal conciliation mechanism in the UAE to resolve labour disputes or circumvent the submission of formal complaints. Once a dispute has reached the Labour Court, any settlement of the claim must be negotiated between the parties. The concept of ‘without prejudice’ discussions is not recognised in the UAE. Accordingly, settlement discussions must be approached very carefully.”
The legal route
The option of legal course can be considered but it is advisable to look for other ways to deal with the company one is working for, advise experts.
“There are some basic steps which can help reduce the risks of labour claims being raised, or at least place the employer in a stronger position to defend any claim raised. These include implementing comprehensive contracts of employment, having clear and consistently applied policies and procedures, and complying with the basic requirements of the Labour Law,” elaborates the employment bulletin of Clyde & Co.
“I would say this depends on intent. If one wants to stay on, then consult an employment lawyer if you cannot get the decision over-turned. If you want to move on, then it matters less. However, you should do your best to have positive references from all your previous employers,” said Hasnain Qazi, Middle East Business Manager, Huxley Associates