UAE | Government

Official: Labour ministry contract supersedes all other documents

Insurance brokerage bypasses rule, makes staff sign letter of intent

  • By Bassma Al Jandaly, Senior Reporter
  • Published: 00:00 May 20, 2012
  • Gulf News

Official: Labour ministry contract supersedes all other documents
  • Image Credit: Supplied
  • Documents obtained by Gulf News show the employees have a limited labour contract under which they are given a basic salary of Dh0.001 and Dh6,000 for accommodation, transportation and other allowances.

Dubai: The Ministry of Labour contract takes precedence over all agreements between employer and employee and is the only document that is recognised by the authorities, the ministry has warned.

A senior labour ministry official told Gulf News any contract between the employer and the employee other than the labour contract will not be taken into consideration.

The warning comes after some employees have complained that they are being deprived of their rights as laid down in the labour ministry's contract.

A group of insurance specialists have alleged that their company is cheating employees by forcing them to sign a letter of intent and depriving them of rights guaranteed by the labour ministry's contract, including basic pay and gratuity.

Paying back commission

The employees who work for Nexus Insurance Brokers told Gulf News that the company was unwilling to accept resignation letters unless the staff hand over all commissions they earned last year.

Documents obtained by Gulf News show the employees have a limited labour contract under which they are given a basic salary of Dh0.001 and Dh6,000 for accommodation, transportation and other allowances.

The letter of intent, which the insurance specialists were forced to sign, says employees were issued a labour contract because it is a requirement of the UAE law. The principal purpose of the labour contract will be to "sponsor employees' activities in the UAE and does not constitute in part or full their contract with Nexus".

"All benefits mentioned in the labour contract issued by the labour department and any other benefit such as accommodation, transportation, leave, air ticket, leave salary, entertainment, gratuity and other benefits are in fact included in commission, and may be stated separately in the labour contract only for the purpose of enabling you to sponsor your family and domestic help in the UAE," the letter of intent says.

R.J., an employee, said they were forced to sign an undertaking that if the company was required by law and the labour contract to pay a certain amount to them, the employees must repay the company commission and collection fees. He alleged that the company does not accept resignations till employees pay back what they have earned in the form of commissions in their last year at work.

"Unless we give them the last year's earnings, they will not cancel our visas," B.F., a former employee, said. "When I resigned, the company handed me a letter that said my resignation would be accepted, but I must first pay a cheque amounting to my last year's earnings. Only then would they give me a release letter."

Employer reaction

Hussain Ayyash, legal and human resources director at Nexus Insurance Brokers, told Gulf News that all the letters of intent are legal and issued to protect the company's rights. "Our employees work on commissions and they earn a huge amount of money. As the employees work on commissions, they have no labour rights. We issue employees a labour contract as a formality as we have to issue it. The labour contract contains certain allowances, which helps employees sponsor their families. But we do not work according to the labour contract. For us, it does not exist."

He said he had filed a complaint at the labour ministry against some employees who had recently resigned and joined competing firms. "We also have to take back commissions they earned in the last year of work with us," Ayyash said.

Gulf News has learnt that the labour court recently ordered Nexus Insurance Brokers to pay Dh20,000 as end of service benefits to a British consultant who resigned and complained against the company to the labour ministry.

Mohammad Bin Dakhin, Director of Governmental Communication at the labour ministry, told Gulf News that any agreement between the employer and the employee other than the labour contract would not be taken into consideration. "In case of dispute between the employer and the employee, the ministry will only consider the ministry's contract," he said.

Bin Dakhin said a letter of intent or internal contracts between the employer and employee are not accepted. "It is illegal to consider that the labour contract has been issued only to allow employees to sponsor their families. Denying workers the rights mentioned in the labour contract is illegal," he said. Bin Dakhin said that any contract between the employer and employee not signed and approved by the labour ministry is not a legal document.

Call helpline

Residents must call the toll-free helpline 800665 for any labour-related issues, including contracts, work conditions, labour cards and work permits, Mohammad Bin Dakhin, Director of Governmental Communication at the Ministry of Labour, said.

"If workers are asked to sign agreements other than the labour contract, they must contact the ministry to enquire about the legality of the documents," he said. The ministry's helpline caters to 14 languages. Residents can also visit labour care units if they need help.

Gulf News