Provide a brief summary of the advice you would provide to your organization on ‘good’ and lawful practice for managing dismissal, retirement and redundancies.

Dismissal

UAE law allows that at initial employment, a period of up to 6 months can be classified as probationary, and the employee can be dismissed without notice. Once probation is over, Labour Law indicates that a 30-day notice must be given prior to dismissal. An employer must provide an acceptable reason for termination. While that is not defined in the law, courts view it as something that must be directly related to the employee’s work, performance, or work conduct. Employers can make a payment instead of letting the employee work out the 30 days. Article 120 lists circumstances when dismissal without notice or payment is possible.

Dismissal should be fair, and a reason should fall under one of 5 categories of capability, conduct, illegality, redundancy, or exceptional circumstance. The reason must be sufficient for dismissal, and employers should have taken the steps necessary to resolve the issue if such is possible. Even in cases of gross misconduct, an investigation should be conducted by HR to determine the circumstances. In other cases, discussions or counseling can be effective at times in improving performance or conduct. A fair dismissal is in line with the organization’s code or rules. Upon the decision, the employee should be notified in writing of the dismissal and the reason. A meeting should occur between the employee and the employer, at which the employee can be represented by a representative. The employee should also be given an opportunity to appeal. Decisions on dismissal or suspension should be taken by more than one individual to ensure impartiality.

Redundancies

Redundancies occur when an organization simply removes the position in which an employee works, essentially leaving that person unemployed. This can occur for various reasons, most often due to cutbacks or restructuring processes due to economic or strategic reasons. The employee is not at fault and is not being dismissed due to any performance or conduct issues. The UAE Labour Law does not have specific statutes regarding redundancies, with courts typically using the dismissal protocol that the employer has the right to remove an employee for any reason if a 30-day notice is given. However, Resolution 279 implemented as part of the COVID-19 pandemic support brings some guidelines for redundancies into UAE Labour Law. It does not specifically define redundancy termination but suggests that courts will support employers who can prove that downsizing was the best alternative for their organization.

At the same time, Resolution 279 requires the employer to provide benefits and allowances to the former employee (exception of basic salary) until the individual secures another employment or leaves the country. Furthermore, the individual must be registered with the MOHRE’s Virtual Labour Market, helping to hire workers into sectors seeing an increase in business operations, with the new employer lawfully hiring the employee.

A fair redundancy process should involve a meeting with all employees and individual meetings with those directly affected. If possible, opportunities for alternatives to redundancy should be considered, such as reduction of benefits, salary, or decreased working hours. Formal updates should be shared with employees throughout the process, providing documentary evidence as reasons for the redundancy and the general economic situation. There is no requirement to pay redundancy payment, but standard termination payments will apply, including a minimum of 30-day notice pay if the probationary period is completed, end-of-service gratuity, payment for unused leave, and, if necessary, repatriation expenses.

Retirement

The mandatory age of retirement in the UAE is 65 years old. However, the limit is increased depending on the nature of work, credentials, and organization of employment. Annual employee visas and permits can be issued past 65 if the employer bears the charges of Dh5,000. In the UK and the EU law, compulsory retirement is unlawful. However, organizations around the world typically operate enhanced redundancy payment schemes to influence retirement or mutually agreed severance; both are legal. It is commonly beneficial for organizations to hire younger employees rather than maintaining old ones as it is both cheaper and the younger generation needs to garner experience. These financial incentives in the form of enhanced redundancy payments or severance packages offer significant benefits for an employee to retire.

Good retirement practices also include planning for retirement with older employees and developing steps for them to step down ahead of time. Older employees can also work in other capacities outside of full time including but not limited to advisory capacity, redeployment, part-time, peak period, and zero-hour contracts. The key is to proactively discuss opportunities for long-term career management and retirement plans for employees that are nearing the age of retirement in the respective jurisdiction.

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Academic.Tips. 2022. "Provide a brief summary of the advice you would provide to your organization on ‘good’ and lawful practice for managing dismissal, retirement and redundancies." November 21, 2022. https://academic.tips/question/provide-a-brief-summary-of-the-advice-you-would-provide-to-your-organisation-on-good-and-lawful-practice-for-managing-dismissal-retirement-and-redundancies-5/.

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