This is the fourth and final post of a monthly series featuring labour and employment related issues in Yemen. The series will provide a comprehensive review of most employment-related issues including statutory and contractual issues, remuneration and working hours, statutory leave entitlements, and termination and gratuity. 

4. Termination Issues

An employee is entitled to compensation in the case where an employer decides to arbitrarily terminate his or her employment contract. Such compensation shall be determined by an Arbitration Committee and may not exceed six months of basic wage. However, employers are entitled to unilaterally terminate a contract of employment without written notice or pay in lieu of notice only in certain circumstances, for instance in case of fraud, the employee being under the effect of drugs, assaulting a fellow employee or causing a material loss to the employer (more cases are listed under Article 35(1) of the Labour Law No 5 of 1995, as amended (the “Law”)).

An employer is also entitled to terminate the employment contract, by notifying the employee, if (i) there is a need for a reduction in the number of employees due to technical or economic reasons (following notifying the Labour Office), (ii) the employee is absent without legitimate reason for over 30 days within the same year or 15 consecutive days (provided that a written warning is first given by the employer), (iii) the employee reaches retirement age, or (iv) the employee is declared unfit to work by the competent medical committee. Terminating the contract of employment for any of the above reasons would not be considered as unfair dismissal. However, if the employer, terminates the employee's contract for any other reason, not specified or permitted by Law, it could be considered as a wrongful termination and the employee may be entitled to bring a claim against the employer for breach of the provisions of the Law.

An employer may not terminate a contract of employment during any of the employee's leave, during the investigation of a dispute between the employer and the employee (unless the employee commits another violation that requires his or her dismissal), or during the employee's detention by the competent authorities in connection with his or her work, while a final decision has not yet been made in relation to the matter.