I read somewhere (can't cite a source off the top of my head) that the king abolished slavery in Morrowind all together after the events of
Morrowind.
Having not been through the Dragonborn content yet, I can't speak as to whether or not 200 years has seen an alteration in this policy. I doubt it though. After what the Argonians did to them last time, I can't see the Dunmer being stupid enough to risk antagonizing them again.
Then again, this is the Dunmer we're talking about.