Basic salary and allowance

Basic salary and allowance

  • Compiled by Dina Aboul Hosn
  • Published: 00:13 October 3, 2008
  • Gulf News

Question: I have been employed with a company for two-and-a-half years now. My basic salary was Dh4,000 when I joined the company. In addition to the basic salary, the company provided me housing and a car. I was told there would be six-month appraisals that would bring 5-per cent increments. The basic salary apart, I did not get any allowances from 2006 till the end of 2007. When I finally received the increment in 2008, the company treated it as an allowance. Because of this, my basic remains unchanged and the increment also stays constant. When I sought an explanation, I was told that the law stipulates that each employee must have a basic component of 70 per cent and an allowance component of 30 per cent in his/her salary. I want to know if it is lawful for increments on the basic salary to be treated as allowances for those who are actually not paid any allowance? If not, what is the procedure to claim back the loss. Please advise. My contract is limited for three years.

Answer: The Ministry of Labour does not interfere in issues pertaining to allowances or revisions of basic salary or allowances and these are determined as per rules in different companies and agreements between the employer and workers. However, the company's explanation that the labour law stipulates that the basic salary shall be 70 per cent and allowance 30 per cent is untrue. Therefore, as per the Labour Law, the worker is entitled to basic salary and an allowance in keeping with the labour contract, with the calculation taking into account the last salary the worker received.

- Questions answered by Advocate Mohammad Ebrahim Al Shaiba of Al Bahar Advocates and Legal Consultants.

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