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DIFC Employment Law: No concept of unfair dismissal

The DIFC Court of First Instance this year issued a key judgment in the case of Hana Al Herz and DIFC Authority [CFI 011/2012], which clarifies certain principal issues relating to the termination of employment in the Dubai International Financial Centre (“DIFC”).

By way of background, Ms Al Herz had been dismissed by the DIFC Authority (“DIFCA”) on 31 January 2012 because it had determined that her conduct “had not been in line with the DIFCA Code of Values and Ethics and the DIFCA Employee Policies and Procedures”. Consequently, Ms Al Herz was dismissed in accordance with the notice provisions contained in her employment contract with DIFCA.

As there is no statutory protection against unfair dismissal in the DIFC Employment Law No.4 of 2005 (as amended) (the “Law”), Ms Al Herz’s primary claim was that notwithstanding the absence of a statutory concept of unfair dismissal, her dismissal should be deemed unfair on the basis that DIFCA had acted in breach of the following implied terms:

  • good faith; 
  • reasonableness; and 
  • a requirement that DIFCA does not conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the parties. 

 

In rejecting Ms Al Herz’s claim, Justice Colman set out the following key points: 

  • There is no concept of unfair dismissal or constructive dismissal in the DIFC; 
  • Employers are entitled to dismiss employees in accordance with the express notice provisions set out in the contract of employment. It is not appropriate to imply terms into employment contracts which fetter the right of an employer to terminate the employment contract; and 
  • The Court will only assess whether the dismissal was conducted in accordance with the employer’s disciplinary procedure where an employer summarily dismisses an employee for “cause”. 

In dismissing the notion that the concept of unfair dismissal should effectively be introduced via terms being implied into the employment contract, Justice Colman stated that “if any such principle of unfair dismissal is to be introduced, it should be by legislation and not by judicial innovation”.

This judgment has since been referred to and upheld by a further DIFC Court of First Instance judgment in Marwan Ahmad Lutfi and DIFCA [CFI 003/2012].

The two judgments are unambiguous and absolute insofar as they confirm that employers may dismiss employees in accordance with the express contractual notice provisions and no additional obligations would be implied on employers. They are certainly positive judgments for DIFC employers and further reduce the ability of employees to pursue claims arising from the termination of their employment.

For more information please contact Samir Kantaria at and Gordon Barr at