UAE court orders firm to pay Dh875,761 in unpaid wages and benefits

The Abu Dhabi Court of Cassation has ordered a company to pay a former employee Dh875,761 in unpaid wages and benefits after finding that the employer had stopped paying her salary without formally terminating her contract.

The employee said her company stopped paying her a monthly salary of US$26,666, around Dh97,866, from April 2025, despite not issuing a termination notice or formally ending the employment relationship.

A court-appointed expert found no letter, email, or document proving that the company had informed the employee that her services had ended. The expert also found that she had received salary payments until the end of May 2025 and was entitled to unpaid wages for the period that followed.

The final award included Dh760,354 in unpaid wages, Dh57,088 in end-of-service gratuity, and Dh58,317 for 29 days of unused annual leave. The court also ordered the company to provide a return air ticket or pay Dh2,500, unless the employee had already joined another employer. Her claim for contractual bonuses was rejected after the expert found she had not met the required conditions.

For employers in the UAE, the ruling reinforces a clear compliance point: salary stoppage cannot replace formal termination. Employment exits must be backed by written communication, payroll closure, final settlement calculations and proper documentation across HR, finance, and legal teams.

The case is also a reminder that weak exit processes can create direct financial exposure. When termination is unclear, organisations risk paying for periods they assumed the employment relationship had already ended.

For HR leaders, the lesson is simple. Every separation must be documented, communicated, and closed properly. In this case, the cost of an unclear exit process was Dh875,761.