Employer ordered to pay Dh875,761 after Abu Dhabi court finds no formal termination

The Abu Dhabi Court of Cassation has ordered a company to pay an employee Dh875,761 in unpaid salaries and employment benefits after ruling that it failed to formally terminate her employment before halting salary payments.

The judgment underscores the legal importance of following proper termination procedures under UAE labour law, with the court finding that the employment relationship remained in force because the employer had not issued any formal notice ending the employee's contract.

The dispute began after the employee filed a labour claim in 2025, alleging that the company stopped paying her monthly salary from April 2025 without notifying her that her employment had been terminated. She sought unpaid wages, notice pay, annual leave encashment, end-of-service gratuity, contractual bonuses, stock-related benefits and damages for alleged wrongful termination during her probation period.

A lower court initially awarded her only compensation for the notice period and the cost of a return air ticket, rejecting the remainder of her claims. However, on appeal, the case was referred to an independent expert to examine the facts.

The expert found no document, letter or email indicating that the company had formally informed the employee that her services had been terminated. The report also noted that the employee repeatedly attempted to contact the employer through phone calls, emails and even a newspaper notice but received no response.

Based on the evidence, the expert concluded that the employee remained legally employed until she filed her lawsuit on 25 November 2025. Although her salary had been paid only until the end of May 2025, the absence of a formal termination meant she was entitled to unpaid salaries covering the remainder of the period, amounting to Dh760,354.

The expert also determined that she was entitled to Dh57,088 in end-of-service gratuity and Dh58,317 for 29 days of accrued but unused annual leave. In addition, the court ordered the company to provide a return ticket to her home country or pay Dh2,500 in lieu of the airfare, provided she had not already secured another job.

The Court of Cassation accepted the expert's findings and amended the earlier ruling, ordering the employer to pay a total of Dh875,761 in unpaid salaries, gratuity and leave benefits, while also covering the employee's legal costs.

However, the court rejected the employee's claims for two contractual bonuses after finding that the eligibility conditions for those payments had not been met.

The ruling highlights the consequences employers may face if they fail to complete formal termination procedures before ceasing salary payments, reinforcing the importance of complying with employment regulations and maintaining proper documentation throughout the separation process.