The case concerned allegations that the owner had suspended the company’s operations without completing the necessary procedures to settle the rights of its employees. The Supreme Court intervened after examining an appeal in which the business owner argued that the company had never stopped operating and that its workers continued to receive their salaries regularly.

According to a report published by Emarat Al Youm on Tuesday, November 3, 2026, the legal proceedings began when the Public Prosecution referred the business owner to court. He was accused of stopping the establishment’s activities without taking the required steps to settle employee entitlements, allegedly violating the provisions of the UAE Labour Law governing the obligations of employers when businesses close or suspend their operations.

The Court of First Instance examined the case and convicted the defendant, imposing a fine of AED 100,000 and ordering him to pay the relevant judicial fees. The business owner challenged the ruling, but the Federal Court of Appeal upheld the original conviction and penalty. The case subsequently reached the Federal Supreme Court through a further appeal challenging the legal reasoning and evidentiary basis of the judgment.

In his appeal, the defendant argued that the lower court’s judgment contained insufficient reasoning and failed to address an essential defence supported by documents. He maintained that the company continued operating, that employees received their wages regularly and that the nature of its building maintenance activities required work to be carried out at external sites rather than continuously inside the company’s registered premises.

The business owner explained that a limited visible presence at the office should not automatically be treated as evidence that the establishment had ceased operating. Building maintenance businesses frequently perform services at clients’ properties, construction sites and other external locations. He argued that the documents submitted during the proceedings demonstrated ongoing activity and regular salary payments, and that those materials should have been properly examined before reaching a determination of criminal responsibility.

After examining the appeal, the Federal Supreme Court emphasized that a criminal conviction must clearly identify the facts establishing the offence and explain how the necessary legal elements have been satisfied. A judgment must provide sufficient reasoning to allow a higher court to assess whether the law has been correctly applied. General or ambiguous descriptions of the alleged conduct are insufficient when they prevent meaningful judicial review.

The Supreme Court also stressed the importance of responding to essential arguments raised by defendants or their legal representatives, particularly when those arguments are supported by documents capable of affecting the outcome. The obligation to address material defences forms part of the procedural safeguards associated with a fair trial. Courts must demonstrate that they have considered relevant evidence and adequately explained why the defence has been accepted or rejected.

In this case, the Federal Supreme Court concluded that the appellate judgment had failed to address the central defence concerning the company’s continued operations and regular payment of employee salaries. It therefore overturned the challenged judgment. The ruling highlights the importance of examining material evidence and ensuring that criminal judgments provide clear reasons supporting their conclusions.

Importantly, overturning the judgment should not be confused with a final determination that the business owner was innocent of all allegations. The Supreme Court’s reported decision concerned shortcomings in the reasoning of the previous judgment and its failure to consider a potentially significant defence. The published account does not establish that the defendant has received a final acquittal or that the underlying allegations have been conclusively resolved in his favour.

UAE employment legislation establishes specific obligations for employers who close establishments or suspend business activities. Companies must comply with applicable requirements concerning the settlement of employee rights and other legal responsibilities. Under the Labour Law and its amendments, certain violations involving the closure or suspension of business operations without settling workers’ entitlements may attract financial penalties ranging from AED 100,000 to AED 1 million.

However, the existence of such penalties does not mean that every reduction in business activity or absence of employees from an office automatically constitutes a violation. The legally required elements must be established through appropriate evidence and procedures. This distinction can be particularly relevant to organisations operating in maintenance, construction and field services, where employees frequently perform their duties away from the company’s main premises.

The case offers an important reminder to business owners about maintaining accurate documentation of commercial activity, employment arrangements and salary payments. Clear records may become essential evidence when questions arise regarding whether a company remains operational or has fulfilled its legal obligations. At the same time, employees continue to benefit from statutory protections designed to safeguard their financial and employment rights when businesses close or discontinue their activities.

The Federal Supreme Court’s intervention underscores the importance of procedural fairness, reasoned judgments and the right to present an effective defence in employment-related criminal proceedings. The case demonstrates that protecting employees and enforcing workplace regulations must be accompanied by careful examination of evidence and compliance with judicial safeguards. The published ruling represents a significant procedural development, while any further outcome must be assessed in accordance with subsequent official judicial decisions.

Source: Emarat Al Youm – UAE Federal Supreme Court – Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relationships and its Amendments – November 3, 2026.