Ask the Law questions are answered by lawyer Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants
Appointment letter
Question 2: A reader from Dubai asks: I have worked for a company for more than three years. In my appointment letter, which I signed at the time of joining, it is mentioned that this appointment letter will supersede the labour contract which I had already signed. In my appointment letter it’s mentioned that the notice period is optional for both parties and any party can terminate the labour contract and there is no need for a notice period, is this legal as per UAE Labour Law?
Answer 2: As per Article (118) of the UAE Labour Law, the notice period is obligatory for both parties and cannot be avoided, even if it is not included in the labour contract or appointment letter. This article also states that it is not legal to agree to waiver or shorten the notice period condition, however an extension can be agreed upon by both parties.
Rent cheque
Question 1: A reader from Dubai asks: Three months ago I signed a tenancy contract with a real estate office. I paid the rent for one year in post-dated cheques and one cheque with an amount of five per cent of the total amount of the tenancy contract as a security deposit. Last month I received a letter from the real estate office, which says that they are handing over the building back to the landlord within one month. They want me to cancel the tenancy contract, which I signed through them and it has already been cancelled by the landlord. I have to collect my cheques including the security cheque deposit. Can the landlord or a new real estate office which will take the building, demand a higher security deposit and higher rent. Do I have to sign a new contract?
Answer 1: If the questioner has signed the tenancy contract with a real estate office; which represent the landlord, in this case his contract is legal and the real estate office shall not have the right to request the same from the questioner nor any increase in rent or a security deposit under the pretext that the real estate office has handed over the building to the landlord, as changing the real estate office or changing the landlord does not affect the rights of the tenant. Therefore, the tenancy contract which the questioner is legal and all parties should abide by it.
Gratuity calculation
Question 3: A reader from Dubai asks: I would like to know the end of gratuity calculation as per Article No 132 of the UAE Labour Law. In my appointment letter it’s mentioned that I’m entitled to a bonus as per my target. It is mentioned that I have to achieve monthly sales of not less than Dh300,000 in order to get a five per cent bonus. Some months I achieved my target and got my percentage and some months I failed to reach that target so I didn’t get anything as per my appointment letter. Is this bonus include in my end-of-service benefits and considered as part of salary.
Answer 3: As per Article (132) of the UAE Federal Labour Law, and in respect with the end-of-service gratuity, we quote the following:
A worker who has completed a period of one or more years of continuous service shall be entitled to severance pay on the termination of his employment. The days of absence from work without pay shall not be included in calculating the period of service. The severance pay shall be calculated as follows:
1- 21 days’ remuneration for each year of the first 5 years of service.
2- 30 days remuneration for each additional year of service provided that the aggregate amount of severance pay shall not exceed 2 years’ remuneration.
Finally regarding the bonus which is mentioned by the questioner as per the labour courts this type of bonus mentioned is not considered as a part of the salary so it is not included while calculating the end-of-service benefits because as per the Dubai Supreme Court it is not a continuous payment, some months the questioner gets paid for it and some months he does not get paid for. It is a conditional payment depending on the target achieved by the employee.
— Compiled by Bassam Za’za’, Legal and Court Correspondent
