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Ask Kabayan

  • Question No. 1
  • I am working in a company for more than four years as machine operator.  Recently, the company’s machine, which I was personally managing, broke down,. The company conducted an investigation and I was held responsible for the full damages. I have been asked to pay for the repair in the amount of AED 25,000.  Given my case, it is allowed, as per the U.A.E. labor law, for an employer to hold the worker responsible for the damages?  If yes, what is the allowable percentage or amount that a company can deduct from my salary, which is currently receive AED 6,000 per month.
  • Answer: Yes, the employer has the right to charge the worker for any legitimately found damages incurred by the employee.  Under Article 61 of the U.A.E. Labor Law, the employee shall reimburse the company for the incurred damages in the amount that shall not exceed five days pay each month.  However, if the employee believes that the damages penalty are unfair or unjustifiable, the concerned employee is recommended to submit a formal complaint to the U.A.E. Ministry of Human Resource and Emiratisation at any Tasheel Centers.
  • Question No. 2
  • I worked in a company for four years under an unlimited contract. Upon renewal of my residence visa, my company had asked me to sign a new limited contract.  Now, I want to resign and transfer before the probationary period to a new company in Dubai.  If I resign from my company, how does it affect my gratuity over the past four years or my current legal status (i.e. labor ban) under the Ministry of Human Resource and Emiratisation?
  • Answer:How to calculate End of Service Benefits
    1-3 years (unlimited resign/terminated)
    3-5 years (unlimited resign/terminated)
    5- Above (resign/terminated)
  • Resignation with service:
    More than 1 year > but less than 3 years = 7 days (out of 21 days) of basic salary annually
    More than 3 years > but less than 5 years = 14 days (out of 21 days) of basic salary annually
    More than 5 years > = 21 days of basic salary annually
    6th year or more > = 30 days of basic salary annually
  • Termination with service:
    Less than 1 year < = 0 gratuity
    More than 1 year >  and less than 3 years = 21 days of basic salary annually
    More than 3 years> and less than 5 years = 21 days of basic salary annually.
    More than 5 years = 21 days of basic salary annually
    6 Years or more > = 30 days of basic salary annually
  • Question No. 3
  • I am currently working in Dubai for a foreign branch company, and we are required to sign a company undertaking, stating that we are not entitled for public holiday in the U.A.E.  Our annual leave pay of 15 days only appear to be contrary to what the other workers receive,  as per company manager’s policy. My question is, is illegal for the foreign branch company to have their own policy/labor law?
  • Answer: The labor law is only applicable to limited liability companies (LLC) covered under the Ministry of Human Resources and Emiratisation.  There are certain labor institutions, including foreign branch Freezone companies, which are excluded from the U.A.E. labor laws.  However, if the foreign branch company is locally registered as an LLC under the MOHRE, then the act of dismissing the government-stated benefits, including annual leave pay, under the U.A.E. labor Laws is considered illegal.  Therefore, it is recommended that the worker should visit the POLO office for further inquiries or submit a formal complaint to the U.A.E. Ministry of Human Resources and Emiratisation through any Tasheel Centers in the U.A.E., if the employer appears to negotiate in bad faith.. Please note that certain companies under DIFC are also excluded from the government’s labor law.
  • Question No. 4
  • I’m working in the company for 9 months; however, the company decided to reduce my salary from AED 2500, to AED 180. Now,  I am being asked to sign an undertaking stating that I am officially accepting the new salary offer. Does the company have the right to reduce my salary, despite of previous contract being signed and attested by the Ministry of Human Resources and Emiratisation?
  • Answer: The employment contract stamped by the U.A.E. Ministry of Human Resources and Emiratisation is a mutual agreement between the employer and employee.  Given this signed contract, neither party can introduce amendments on their own, unless there is consent from the employee or employer.  If the employer forces the employee to sign a contract, then it is recommended that the worker should visit, call or email the POLO Office for inquiries.  The worker may also opt to submit a formal complaint directly to the Ministry of Human Resources and Emiratisation through any Tasheel Centers.  Please refer to Article 4, Ministerial Resolution 764 (2015).
  • Question No. 5:
  • A worker rendered resignation with under limited period with valid reasons. The ministry’s legal officer imposed to worker a 1 year ban and forced the worker to sign the settlement in front of them. Is 1 year ban imposed by the legal officer to worker is legal? In what provision?
  • Answer: Under the new law (Ministerial Resolution 766/3015), if an employee resigns without any mutual agreement with the employer and fails to complete six months probationary period (specifically for those workers with less than high school qualifications), he or she faces an automatic one year ban from the employer.  Depending on the “reasons,” if the worker wants to avoid the one-year ban, he or she must proved that the employer has violated the contractual terms and conditions.In addition, Article 116 of the U.A.E. Labor Law No. 8 also states the an employee is liable to compensate the employer against losses due to contract termination that shall not exceed half a month’s pay for a period of three months of the remaining contract period.
  • Question No. 6
  • A worker is terminated without valid reasons under limited period contract. Is 1 year ban imposed to him by legal officer is legal? In what provision?
  • Answer: Under the U.A.E. Labor Law 8, Article 120, the employer may dismiss the employee without notice in the following cases:
    1. If the employee adopts a false identity or nationality or if he submits   forged documents or certificates.
    2. If the employee is appointed under a probationary period and dismissal occurred during or at the end of said period.
    3. If he commits an error causing substantial material loss to the employer provided that the latter advises the labor department of the incident within 48 hours from having knowledge of the same.
    4. If the employee violates instructions concerning safety of the place of business provided that such instructions are displayed in writing at conspicuous places and in case of an illiterate employee the latter be informed verbally of the same.
    5. If he fails to perform his basic duties under the contract of employment and persists in violating them despite formal investigation with him in this respect and warning him of dismissal if the same is repeated.
    6. If he divulges any secrets of the establishment where he is employed.
    7. If he is awarded final judgment by the competent court in respect of an offence prejudicing honor, honesty or public morals.
    8. If during working hours he is found drunk or under the influence of drug.
    9. If in the course of his work he commits an assault on the employer, the manager or any of his colleagues.
    10. If he absents himself without lawful excuse for more that twenty intermittent days or for more than seven successive day during one year. Article 122 further adds, Article (122) Termination by the employer of an employee’s service is considered arbitrary if the cause for such termination has nothing to do with the work. In particular, termination is considered arbitrary if the employee’s service has been terminated on grounds, or a reasonable complaint lodged by him to the competent authorities, or on grounds of a justifiable action brought by him against the employer. However, if the employer terminated the worker without valid reasons, then the employee is entitled to three months of salary payment in advance. He or she will also not face a one-year ban if she has already passed probationary period.
    11. A worker rendered resignation under limited period contract with reason of pregnancy, filed prior notice of one month, which is already lapsed. However, the employer is demanding the amount of 3 months salary from the worker. What is the provision?
  • Answer: If the employee decides to resign under a limited contract, he/she shall be required to compensate the employer for any damage the latter sustains as a result, provided that the amount of compensation shall not exceed half a month wage for three months or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.  Please note that the employer under Article 124 is prohibited from terminating an employee due to health deficiency.  A working woman, however, is entitled under Article 30 forty five (45) days, including before and after delivery, provided that she has continuously worked for at least one year for the company.
  • Question No. 7
  • A group of workers filed a complaint at the Ministry of Human Resources and Emiratisation or MOHRE but the legal officer appeared to favor the employer.  The legal officer  then immediately endorsed our case to the court. Unfortunately, we lost in court due to the recommendation of the legal officer. Do we still have the right to report directly to the labor relation manager at the Ministry of Human Resource and Emiratisation for reconsideration in this regard?
  • Answer: If the complaint(s) loses a case in the Dubai Court, he or she can still seek appeal from the Dubai Court by resubmitting a complaint form through Tasheel Centers in the U.A.E.
  • Question No. 8
  • What is the exact computation of gratuity under unlimited contract period for those whose contract duration is less than one year and more than 6 month?
  • Answer: Under an unlimited contract, if a worker has completed a contract duration less than one year but more than six months, then he or she has no legal right to claim gratuity.  Gratuity is only granted and applicable to employees who completes at least one year of continuous company work.  Please refer to the Section 2 – End of Service Remuneration of the U.A.E. Labor Law Article 132.