UAE: Can an employer demote worker without giving a valid reason?

Question: I was hired for a managerial position at a Dubai-based company. I have just been told that I will be demoted to an Assistant Manager position over my 'performance'. When I asked for an explanation about what was lacking in my performance, the company was not able to give a proper answer. Are demotions legal in the UAE? If so, what's the procedure that must be followed?

Answer: Pursuant to your queries, it is assumed that you are employed in a managerial position at a mainland company located in Dubai. It is also assumed that your employment contract registered with the Ministry of Human Resources & Emiratisation mentions your designation as a manager with your employer. Therefore, 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 Regulation of Employment Relations and Administrative Resolution No. 38 of 2022 Concerning the Guidelines for Implementing Ministerial Resolution No. 46 of 2022 Regarding Work Permits, Offer Letter and Employment Contract Forms are applicable.

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In the UAE, it is an obligation of an employee to work diligently and be efficient in his or her work while being employed by an employer. This is in accordance with Article 16(8) of the Employment Law, which states, “The employee shall work diligently and constantly to develop his professional and job skills, and improve his performance to the employer.”

An employer may not assign alternative work to an employee, for more than 90 days period, which is fundamentally different from an employment contract executed by an employer and an employee. This is in accordance with Article 13(1) of the Cabinet Resolution No.1 of 2022, which states, “Subject to the provisions of Article 12 of the Decree Law, the employee may be assigned to alternative work that is fundamentally different in nature from the contractually agreed work, as an exception that is considered necessary or to prevent an accident or to repair damage caused by the employee. The maximum limit for assigning the employee to such work shall be 90 (ninety) days per year.”

The Employment Law and its subsequent ministerial resolutions are silent related to the demotion of an employee or change of his or her designation. However, an employer may have its own rules and regulations related to penalties, promotions and rewards and the same should not be contrary to the provisions of Employment Law and its subsequent ministerial resolutions if it is employing 50 (fifty) or more employees. This is in accordance with Article 14(1) of the Cabinet Resolution No. 1 of 2022, which states, “Subject to the provisions of Article (13) of the Decree-Law, establishments that employ 50 or more workers shall set rules regarding the organisation of work, such as the regulation of work instructions, penalties, promotions and rewards, and the procedures for terminating the employment relationship, subject to the following:

· “The rules shall be set in a manner that does not contradict the provisions and rules set out in the Decree-Law, the provisions of this Resolution and the Legal Regulations.”

Furthermore, an employer needs to impose disciplinary actions against an employee in writing and needs to conduct a relevant internal investigation as mentioned in Article 39 of the Employment Law read with Article 24 of the Cabinet Resolution No. 1 of 2022.

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