Supreme Court ruling says managers can move staff at will


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ABU DHABI // The Supreme Court has ruled that managers have the right to move employees whenever they see fit - even to a different job in a different institution, and even if they are not qualified to do the job.

"A management - using its discretion - has the right to relocate an employee to a new place or a new job if the decision is in the public interest and would enable the management to regulate its facility," the president and chief justice of the Federal Supreme Court, Dr Abdulwahab Abdul, wrote in a ruling yesterday.

And he added: "As a rule, a management does not have to reveal its reasons for making the decision [to dismiss an employee]."

The chief justice made the ruling in a case involving an Islamic studies teacher who, until 2009, had worked in Abu Dhabi for 13 years without being promoted.

The unidentified Emirati, along with several others, was moved to an administrative position at the Ministry of Labour.

The man sued his original employer, the Ministry of Education, saying it had moved him against his will to another ministry and to a job for which he was not qualified.

His case was rejected by the Federal Court of First Instance in February last year and by the Federal Court of Appeal last December. On appeal, the Supreme Court rejected the case but accepted the validity of his promotion demands. An appeals court then ruled that an employee has the right to demand promotion every three years.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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