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UAE Company Ordered to Pay Dh875,700 After Failing to Formally Terminate Employee

Sun, Jul 5, 2026(46d ago)UAE

The Abu Dhabi Court of Cassation has delivered a landmark ruling against a local firm, ordering it to pay an employee Dh875,761 in outstanding wages and benefits. The dispute arose after the company ceased paying the employee’s monthly salary of Dh97,866 in April 2025 without issuing a formal termination notice. Because the company failed to provide legal documentation ending the employment contract, the worker remained in a state of limbo, unable to switch employers while continuing to fulfill her professional obligations.

A court-appointed expert concluded that there was no record—neither through emails, letters, nor official notices—indicating the company had ever officially dismissed the worker. Consequently, the court ruled that the employment relationship remained legally active until the lawsuit was filed in November 2025. In addition to the unpaid wages, the final judgment includes the employee’s end-of-service gratuity, compensation for unused annual leave, and travel costs. While the court denied the worker's additional claims for contractual bonuses, the ruling serves as a stern reminder to employers regarding the legal necessity of following proper termination procedures.

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