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An employee working in the UAE cannot be terminated from his services while he is on annual leave.If an employer does dismiss a member of his staff while s/he is officially on leave, it may be considered an arbitrary dismissal and the affected employee can take course to legal action.
It is not permissible to dismiss or serve notice on an employee during annual leave. Where an employer does dismiss or serves notice, it will be possible to challenge the dismissal or notice as being void. However, the reason for termination is one of the ten reasons set out under Article 120, the employer can act against his member of staff.
If the employer terminates the contract for reasons that are outside Article 120 of the Labour Law, he will be liable to pay compensation to the employee. This compensation will vary according to whether the employee was employed on a fixed or unlimited term basis.
Where the employee was employed under an unlimited term contract, the compensation is at the discretion of the Court but shall be limited to a maximum of three months’ wages. Where the employee was employed under a fixed term contract, the compensation shall be equal to the lesser of the wages due for the remainder of the fixed term or three months’ wages, unless otherwise stipulated in the contract.