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UAE Labour Law: How much job termination salary are you entitled to?

UAE courts tend to favour employment contracts that are more favourable to employee

new-uae-labour-law-rules-post

The amount of money that is given to an employee on termination can vary depending on several factors, say UAE-based legal experts. Knowing the law, therefore, is vital.

When in doubt, employees should refer to their contracts, which should specify the amount that will be due to them on termination.

“It [compensation that one is supposed to receive upon termination] varies depending on the circumstances of each case,” says Jamie Liddington, Head of Employment at legal firm Hadef & Partners.

“An employee who is dismissed arbitrarily can expect to receive an award of compensation to include (among other contractual entitlements) – payment in lieu of any unpaid part of the notice period; payment in lieu of accrued but untaken annual leave; up to three months’ wages as compensation for arbitrary termination and end of service gratuity,” he told Emirates 24|7.

“Each employee’s notice period should be written in the contract of employment. All employees must be paid their full salary and benefits for the duration of the contractual notice period until their termination date,” says Thenji Macanda, Senior Associate at Taylor Wessing (Middle East) law firm.

What the law saysuae-labour-law-2015-expatmoney (1)

As per Macanda, if no notice period is specified in the contract of employment, then according to Article 117 of the UAE Labour Law, at least 30 days’ written notice should be provided. This period differs for daily paid workers who have been employed for less than 5 years.

“Article 118 of the UAE Labour law states that a contract of employment will continue to be valid for the notice period and the parties cannot agree to reduce or dispense with the notice period. If, however, an employer reduces the notice period and terminates the employee before the end of the notice period then in accordance with Article 119 of the UAE Labour law, the employee must be paid compensation in lieu of notice equivalent to the notice period. The parties can increase the notice period and if this is done, then the employee must be paid their contractual pay for the duration of the notice,” she elaborates.

When can your employer forfeit your termination compensation?

The law fully protects workers in the country but there are certain clauses under which there will be notice period from the employer’s side and subsequently no payments.

Liddington clarifies that employees who are dismissed “for cause” (under Articles 88 or 120 of the Labour Law) will not be entitled to receive notice of termination (or payment in lieu of notice) and they are likely to forfeit the end of service gratuity.

Contract letter v/s Labour Law – what will hold?

What will hold – the contract letter that is signed between the employer and the employee or the labour law of the country in case of termination? Again, there is no clear cut verdict that can be followed here but the courts usually uphold the one that is more favourable to employees.

“Where there is inconsistency or conflict between the company supplementary contract and the Ministry of Labour contract/free zone contract, the courts tend to favour the employment contract that is more favourable to the employee,” says Macanda.

“As an example, if the company supplementary contract sets out a two month notice period (which is over and about the one month statutory notice set out in the Labour Law), the company will be held to the longer notice period of two months. We always recommend to employers that they should strive to ensure that the all contracts mirror each other as far as possible to avoid uncertainly,” she adds.

The Hadef expert says ideally, the Labour courts will allow the employee to rely on whichever (contract or Labour Law) is most favourable.

“Both the standard form (Ministry of Human Resources and Emiratization or free zone) employment contract and any supplemental private contract are potentially enforceable documents and to the extent that the terms of any contract are less advantageous to the employee than the Labour Law, they will not be valid or enforceable.

“In the event that the terms of the contract(s) are more favourable than the Labour Law, the courts will apply the more favourable contractual term.  Where the terms of the standard form contract conflict with the terms of the private contract, the courts’ approach is to allow employees to rely on the more favourable of the two conflicting terms,” he adds.

COURTESY : Emirates 24/7

New UAE Labour Law: 7 points your employment contract must include

Should you insist on retaining original job offer with you?

Since January 1, 2016, the UAE has implemented sweeping reforms to the old Labour Law, plugging loopholes that now make employees even more content and secure in their workplace.

Primary changes in the new regulations pertain to employment contracts for workers hired from abroad, termination of job contracts, and issuance of new labour permits to resident workers.

According to new regulations, any offer letter made to a foreign worker is legally binding once accepted and signed by both parties.

This means that the employment contract should be based on the offer letter signed by both parties. The contract, however, must include a set of information.

The resolution issued by the Minister of Labour mandates that employers will be required to disclose to the Ministry the terms of the offer made to a foreign worker.

As per law, the following seven points need to be specified in all employment contracts.

These include:

1) Wages/remuneration payable.

2) Date of the employment contract.

3) Date of commencement of the employment contract.

4) Nature of the contract (limited or unlimited).

5) Nature of the work.

6) Duration of the contract (for fixed term contracts).

7) The location of employment.

According to the ministry, it has begun implementing new procedures for issuance of work permits where employers are obliged to provide the job offer and annexes containing a comprehensive description of rights and duties between both parties.

The documents must be signed (or bear the thumbprint, depending on job classification) after which a copy of the job offer should be presented to obtain an authorisation to enter the country followed by the issuance of a work permit and signing of the contract.

The ministry praised the reaction of many companies to the newly launched decrees that have been applied since January.

“Many of the establishments that have applied for new work permits under the new decisions proved their commitment to establishing a transparent working relationship with workers who were brought from abroad, therefore, they proved their sincere commitment to protecting workers through innovating new methods that will monitor the workers’ signature/thumbprint and follow up on all processes,” says Humaid Bin Deemas Al Suwaidi, Assistant Undersecretary for Labour Affairs at the ministry.

“Since the implementation of the new decisions, the ministry cooperated with a number of enterprises that have applied for new work permits in order to determine the procedures followed to brief workers on job offers. Officials in some of these facilities said they dispatched HR employees to a labour-sending country to closely brief the workers on job offers and then signed it followed by a photograph for documentation purposes.”

Who keeps the original job offer contract – you or your employer?

Are you worried about your original job offer not being with you?

If this important document is with the company you are employed with, it is well within the legal rights of your boss and you have nothing to worry about.

The Ministry of Labour has called upon employers to keep the original job offer contracts, signed by both parties, in case of legal disputes.

The ministry’s undersecretary has said that workers may contact the ministry in case they find a false signature on the job offer before signing the employment contract.

In such cases, employers are required to bring the original job offer that will then be referred to the court for further inspection, he said.

courtesy : http://www.emirates247.com/

Revealed: Number of fixed-term and non-fixed term jobs approved in UAE

Ministry of Labour issued over 233,000 labour contracts in January, 75% are non-fixed term

The Ministry of Labour has reviewed over 250,000 job offers presented by private sector firms since the beginning of this year, and has issued 233,000 labour contracts, of which 75 percent are of non-fixed term.

Humaid bin Deemas Al Suwaidi, Assistant Under-Secretary for Labour Affairs, said, “The number of job offers printed during the last month confirms the clarity and ease of a working relationship between employers and workers in accordance with the newly launched Decrees, which aims to establish and promote a balanced and productive working relationship between both ends, based on cooperation and transparency, in order to preserve rights.”

He said: “Workers must look into job offers and annexes in their preferred languages before signing the contracts to reach a healthy work relationship between both parties; annexes must be reviewed as they hold a number of labour laws and amendments.”

Al Suwaidi said the ministry has ratified a total of 233,190 new and renewed labour contracts during January, of them 75 percent were non-fixed term, equal to over 175,790, and fixed-term contracts reached 57,400.

“The rise in non-fixed term contract numbers indicates that employers have identified their choice of that type of relationship in accordance with the new Decrees, something contrary to that which prevailed in the labour market previously, as fixed-term contracts are considered the most commonly used by employers back then,” he said.

Bin Deemas believes that the picking fixed-term contracts applies mostly to labourers as it may seem that the nature of their occupations requires that type of contract, which carries both parties agreement to abide by legal responsibilities between each other, especially in the event of a party deciding to violate the terms of the contract or wish to end it without the consent of the other party.

Al Suwaidi said, “Conditions that must be followed in the event that one of the parties decided to end a fixed-term contract during the renewal period, starts by notifying the other party before the date of termination (in a specified period agreed by both ends) not less than one month and not exceeding three months, where those who decided to terminate the contract must complete the notice period then pay agreed dues not exceeding the total remuneration of three months’ salary, and this applies for both sides.”

Ministry tells employers to keep original job contracts

The Ministry of Labour called on employers to keep the original job offer contracts, signed by both parties, in case of legal disputes where the worker may deny the signature or thumbprint on the document.

The ministry has begun implementing new procedures for issuance of work permits where employers are obliged to provide the job offer and annexes containing a comprehensive description of rights and duties between both parties. The documents must be signed (or bear the thumbprint, depending on job classification) after which a copy of the job offer should be presented to obtain an authorization to enter the country followed by the issuance of a work permit and signing of the contract.

The ministry praised the reaction of many companies to the newly launched decrees that have been applied since January, as per the directives of Saqr Ghobash, Minister of Labour.

Humaid Bin Deemas Al Suwaidi, assistant undersecretary for Labour Affairs at the ministry, said; “Many of the establishments that have applied for new work permits under the new decisions proved their commitment to establishing a transparent working relationship with workers who were brought from abroad, therefore, they proved their sincere commitment to protecting workers through innovating new methods that will monitor the workers’ signature/thumbprint and follow up on all processes.”

“Since the implementation of the new decisions, the ministry cooperated with a number of enterprises that have applied for new work permits in order to determine the procedures followed to brief workers on job offers. Officials in some of these facilities said they dispatched HR employees to a labour-sending country to closely brief the workers on job offers and then signed it followed by a photograph for documentation purposes.”

He said: “Others contacted the employment agency in one of the Asian countries that had briefed workers on job offers, watch them sign it upon acceptance and then forwarded the letters to the concerned party to issue a work permit.”

Some employers have gone beyond the normal requirements and documented the employees’ signatures on the contracts by photographing them while they are signing.

Bin Deemas called on workers to contact the ministry in case they find a false signature on the job offer right before signing the labour contract. In such cases, employers are required to bring the original job offer that will then be referred to the court for further inspection.

Employers must keep a close eye on signed job offers and make sure that it has been signed by the worker as the responsibility is the employer’s. However, labour courts are the competent authority to deal with such issues.

The procedures apply to workers residing in the UAE and seek to move from one establishment to another, either by signing the proposed job offer or placing their thumbprint depending on their skill level, all before approaching the ministry to request a work permit.

courtesy : http://www.emirates247.com/

Work permits will not be issued without new contract from 2016

Ministry to refuse work permits without signed unified contracts starting 2016

Dubai: Residents cannot renew their work permits nor will they be issued new permits if an employer fails to provide a signed unified contract starting 2016, the Ministry of Labour revealed on Tuesday.

The unified labour contract, to be implemented from January 1, standardizes employment terms, making them more transparent. The contract is expected to improve regulation and transparency of the UAE labour market.

The contract was drafted by the Ministry as part of the three new decrees, which are aimed at enhancing the UAE labour market conditions and consolidating the contractual nature of labour relations.

All employees across the country will be presented with a unified, standard, employment offer that contains clear and enforceable terms and conditions of employment, prior to the worker’s entry into the UAE.

The contract will need to be signed by both the employer and the worker.

Humaid Bin Deemas Al Suwaidi, Assistant Undersecretary for Labour Affairs, said, “The new measures implement three new decrees issued by Saqr Ghobash, Minister of Labour, recently with regards to regulating the labour market, starting by unifying a contracts model approved by the ministry for all labour relations.”

During a meeting held in Abu Dhabi, attended by 300 employers and government relations representatives, Bin Deemas reviewed the new measures the ministry is implementing to ease the process of extracting work permits for employees coming from outside or those residing in the country, while maintaining rights of both sides.

Labour Mobility

Bin Deemas pointed out that the new procedures of recruiting foreign workers from outside the country on a two-year work visa goes through three stages.

Firstly, the employer applies for quota regardless of the number of workers recruited, the second demands printing the offer letter handed to the worker containing a comprehensive description of their rights and duties, terms and conditions, through “Tas’heel” service centres or through the ‘MoLApp’ smartphone application.

“Furthermore, within the second phase, employers should electronically sign a job offer, send it to the worker regardless of their location — whether electronically to the worker himself or through an employment agency. If he accepts the terms and conditions, he then signs it (those who fall in the first, second and third occupational levels) or [put a] fingerprint (for workers in lower work levels),” Bin Deemas said.

The offer letter will be in both Arabic and English in addition to a third language that the worker understands, which can be available on the ministry’s website ‘www.mol.gov.ae’ containing comprehensive details of terms, regulations and labour laws. Bin Deemas said that “each worker can review their work contract through the ministry’s website after registering on the site using the passport number, nationality and transaction number as each has its own code.

During the final stage (the work permit extraction), employers attach the signed offers by the worker for initial approval, where the ministry works on reviewing the application to make sure it meets all the requirements and then issues the permit, which allows the worker to come to the country.

“Employers face a 14-day deadline to complete signature procedures following the worker’s entry into the UAE, if the worker complains of any delays then the ministry will allow him to seek a new offer,” he said.

“The electronic system of the ministry will not allow new job offers for workers following the initial approval stages, and replacing work permits will be treated according to specific procedures…,” he said.

Under the new measures, Bin Deemas pointed out that “it’s not mandatory to include a medical report with job offers, especially as today we are electronically linked with the public administrations of Residency and Foreigners Affairs, which does not issue workers with a residence visa with medical report.”

Referring to the contracts renewal process, Bin Deemas said that the worker’s signature is also a prerequisite for the ministry, as it grants workers a free will whether to renew the contract after accepting highlighted privileges and requirements or simply chose to end the relationship and find a better offer or move back home, something that establishes a healthy working relationship ending misunderstanding between both parties.

Courtsey : Gulf News

You can quit job without notice if employer fails to meet obligations

The employee must immediately report non-payment of salary to the Ministry of Labour and file a complaint against the employer.

My friend is working as an accountant since one year at an entity based in the UAE. However, she has not received her salary for two months, owing to the fact that the employer has taken in its possession ATM Cards of all its employees. The employer deposits salary in the accounts of each employee in accordance with the Wage Protection Scheme regulations, but subsequently, the employer withdraws the money using the employees’ ATM cards.

Under these circumstances, can she shift to a job without getting a labour ban?

It is presumed that your friend’s employment is subject to provisions of the Federal Law No 8 of 1980 on the Regulation of Labour Relations (the “Labour Law”).

Pursuant to the first part of your question, it may be noted that your friend shall be within her rights to terminate her current employment, as her employer has failed to fulfil its obligations towards her as its employee, as your friend has not received her salary for the last two months. However, your friend must immediately report non-payment of salary to the Ministry of Labour and file a complaint against her employer.

Therefore, if your friend should decide to terminate her employment, she may not face the imposition of an employment ban, as the reason for termination of employment contract may be attributable to the employer. This is in accordance with the provisions of Article 121, which states: “A worker may leave his work without notice in either of the following case:

(a) If the employer fail to comply with his obligation towards him, as provided for in the contract or in this Law;

(b) If he is assaulted by the employer or the employer’s legal representative.”

Pursuant to the last part of your question, it may be noted that the acts perpetuated by your friend’s employer may actually amount to unauthorised use of ATM cards, which is a punishable offence in the UAE. Owing to this, your friend along with other employees of the same entity may also consider to approach the police and file a complaint against her employer. However, in any case, it is advisable for your friend to simultaneously file a complaint against her employer at the Ministry of Labour as well.

Courtesy: khaleejtimes.com

 

Know the Law: When, why UAE employer can withhold your gratuity

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There are areas where employer can build case for not paying employee in service for more than one year: legal experts.

The UAE labour law dictates that gratuity or end-of-service benefits are payable to employees who have completed one year or more in continuous service.

Despite meeting that criterion, there are a few clauses that can keep an employee from receiving the payment.

The first most obvious clause is less than a year of service, which is common knowledge.

“Where an employee is engaged under an unlimited term contract, no end-of-service gratuity (ESG) will be payable where the employee has been continuously employed for less than one year,” Jamie Liddington, Head of employment at Hadef & Partners, told this website.images (2)

There are other areas as well where the employer can build his case for not paying the employee despite being in service for more than one year.

It’s also important to understand some core points of difference when it comes to gratuity for those under a limited or unlimited contract, and here are the scenarios that can keep you away from getting your gratuity amount in your bank account.

According to Liddington, those under unlimited term contract may have to skip this amount if s/he “has been continuously employed for more than one year but resigns without providing the minimum period of notice required under the contract and without reasonable grounds to show that [firstly] the employer had, at the time of the resignation, failed to honour his contractual obligations to the employee or [secondly] he was assaulted by the employer or his employer’s legal representative.”

Then, there is a list under article 120, which employees should be aware of when it comes to gratuity entitlements.

Speaking to Emirates 24|7, Sara Khoja, Partner at law firm Clyde & Co says: “An employee who is terminated under article 120 of the Federal Labour Law, Law no 8 of 1980, is not entitled to end -of-service gratuitimagesy benefit or notice.”

Another scenario when the gratuity payment can be withheld is when “the employee has been continuously employed for more than one year but the employee’s employment is terminated for a reason set out under Articles 88 or 120 of the Labour Law,” states the expert at Hadef & Partners.

Khoja explains the clauses in article 120, under which gratuity will not be paid.

These include:

• Termination during probation or on its expiry.

• If the worker has adopted a false identity or nationality or submitted forged certificates or documents.

• If a worker makes a mistake causing substantial material loss to the employer provided the employer notifies the relevant labour department within 48 hours of the accident.

• If the worker disobeys instructions regarding industrial safety or the safety of the workplace provided the instructions have been issued in writing and are posted conspicuously in the workplace in a language accessible to the employee or explained to him orally.

• If the worker does not perform his basic duties under the contract and persists in violating these despite being investigated and receiving a written warning notifying him of termination in the event of repeat offences.

• If the worker reveals his employer’s trade or business secrets or confidential information.

• If the worker is finally sentenced by a competent court for an offence involving honour, honesty or public morals.

• If the worker is drunk or under the influence of an illegal drug during work.

• If while working the worker assaults the employer or his manager or a colleague.

• If the worker is absent from work without a valid reason for more than 20 non-consecutive days or more than 7 consecutive days.

Those working in another company without getting set approvals from the employer can also jepoardise their gratuity.

“Article 88 concerns working for another employer (without permission) during a period of annual or sick leave,” says Liddington, and this can lead to problems for the employee.

In cases where an employee is engaged under a limited or fixed term contract, “no ESG will be payable where the employee resigns before completing five years of continuous service unless he can show that (i) the employer had, at the time of the resignation, failed to honour his contractual obligations to the employee or (ii) he was assaulted by the employer or his legal employer’s legal representative,” he explains.

As per Khoja, those engaged on an unlimited term contract may get a reduced amount if the minimum term is completed.

If an employee “resigns in the first five years of employment, the end of service gratuity entitlement is reduced to 1/3rd if the employee has between 1 and 3 years of service and to 2/3rd if the employee has between 3 and 5 years of service. The employee may resign without suffering any reduction in gratuity if he has 5 years of service or more.

“If an employee is engaged on a fixed term contract then he must complete the duration of the term in order to be entitled to gratuity. If he has 5 years or more of service then he can resign without completing the term of his fixed term contract and will still be entitled to end of service gratuity,” she adds.

The above information is relevant for UAE onshore companies and not those domiciled in the DIFC, which has a different employment law – Law No 4 of 2005 as amended.

courtsey: Emirates 24/7

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