I received a termination letter from my company for restructuring. Is this considered arbitrary dismissal?

Hello,

Arbitrary dismissal refers to a situation where an employee is terminated without a valid justifiable reason.

The reason for termination provided in your case—"considering the current business scenario, the company has considered measures to reorganize the business"—sounds like a redundancy situation.

Redundancy is typically allowed under UAE labor law if the company is undergoing a reorganization or downsizing due to financial difficulties or market conditions.

For further assistance kindly share your Whatsapp number.

Dear Inquirer

We are pleased to serve you and address your inquiries.

The Labor Law has defined cases of arbitrary dismissal, but the case initiated by you is not among them.

contact us via email or call our offices in Dubai or Sharjah.

Jasim Al Haddad Advocates & Legal Consultants

Arbitrary dismissal generally refers to the termination of an employee's contract without a valid reason or justification related to their performance or conduct.

Your company's reason for restructuring could be considered valid if it can demonstrate a genuine need to restructure, such as financial difficulties or a change in business strategy.

In this kind of situation, you will be eligible for compensation according to company policy. If you need further clarification, you may ask.

According to UAE law, if the termination is based on vague reasons like "business reorganization" without a valid legal cause, it could be considered arbitrary dismissal.

You are entitled to end-of-service benefits, unused leave compensation, and payment for the notice period. You can contact us via WhatsApp for further legal assistance, as we specialize in such cases.

Dear Questioner,

Thank you for your inquiry regarding your recent termination.

From the information provided, your employer has issued a notice of termination citing "business reorganization" as the reason, with a one-month notice period ending on February 28th, 2025.

Based on UAE Labour Law, termination due to business reorganization is generally considered a valid reason if it involves a genuine restructuring or downsizing.

However, whether this constitutes arbitrary dismissal will depend on whether the employer has followed the correct procedures and acted in good faith.

In terms of compensation and entitlements, since your termination includes a one-month notice period, you are entitled to:

- Full payment of your salary during the notice period.

- Severance pay, which depends on the length of your employment. If you have been employed for over a year, you would be entitled to severance pay calculated as follows:

- 21 days' salary for each year of service for the first five years.

- 30 days' salary for each year of service beyond five years.

- Any unpaid salary, unused vacation days, and other contractual benefits should also be paid.

If you believe that the termination was arbitrary or unjustified, you may have the right to file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) to seek compensation for wrongful termination.

However, the circumstances of your case (such as the reason provided for termination) would need to be examined more closely to determine if any legal action is necessary.

In any case, I would recommend consulting with an employment lawyer to ensure that your rights are fully protected and to assess whether you are entitled to additional compensation or damages.

Please feel free to reach out if you need further assistance or would like to discuss your options in more detail.

Best regards,

Mohammed Salah

Legal Consultant

Labor benefits are only due if you have completed more than one year with the company, including end-of-service benefits and other benefits

This is not considered arbitrary dismissal.

If you have any other inquiries, contact us on the phone.

Greetings.

You can send your employment contract and the decision to terminate your employment on WhatsApp so that we can provide you with more accurate information.

We are happy at Future Vision Law Advocates and Legal Consultancy to assist you and provide the best legal services that meet your needs.

To contact us, you can email, call, or WhatsApp us.

Wishing you a pleasant day ahead,

Your termination appears to be based on business restructuring rather than personal misconduct, which is generally considered a lawful reason for dismissal in the UAE.

However, to determine if it qualifies as arbitrary dismissal under UAE Labour Law, factors such as the actual necessity of restructuring and whether other employees were affected would be relevant.

If the termination is deemed arbitrary—meaning it was unfair or lacked legitimate grounds—you may be entitled to compensation of up to three months’ salary.

Regardless, you are entitled to your full end-of-service benefits, including gratuity (if applicable), any pending salaries, unused leave encashment, and any other contractual entitlements.

Hi

Pursuant to your query, and as per labor law, this is not arbitrary dismissal and you can not ask for any compensation because the company followed the law and sent you a termination letter with one month's notice period.

Have they signed a replacement for your position?

What was your position in the company?

We need to review the employment contract between you and your employer along with payment slips.

Please note that restructuring can be considered arbitrary if they have hired someone else in your position or used business restructuring as a reason for dismissal.

Based on the review, we will guide you in providing potential legal solutions.

Looking forward to your response.

Please feel free to reach out to us on our WhatsApp for further details.