Not paid bonus for two years, what are my legal rights as an employee?

Dubai: With the COVID-19 pandemic affecting business across the world for the past two years, the UAE has taken various steps to counter the impact it has had on businesses and the lives of people in the country. In March 2020, the UAE’s Ministry of Human Resources and Emiratisation (MOHRE) issued a Ministerial Resolution ensuring the interests of employers and employees are protected as precautionary measures were put in place to find the virus.

While the resolution provided detailed guidelines on steps employers could take if they were impacted by the pandemic, what are the rights of an employee if bonus payments are not given by an employer during this period? This was the query raised by a Gulf News reader.

He said: “I am working with a mainland company in Dubai for over eight years. My question is regarding leave encashment. Every year, once the year would be completed based on our joining date, we were provided 30 days salary as leave salary along with one month’s basic salary as bonus, which we referred to as leave settlement. Whenever we actually went on leave, the actual salary was deducted based on the number of days we were on leave.

“This was the policy followed by my company since its inception. However, I have not received my leave salary for the past two years. I approached my immediate boss quite a few times, requesting him to release the leave salary but he asked us to forget the leave salary and to be thankful that they have resumed our regular salaries. In 2020, they did reduce our salary by 20 per cent for six months. I would like to know what my legal rights are and how I should get my leave salary, which is due for two years.”

Gulf News raised the query with Dr Ibrahim Al Banna, CEO of Dubai-based Ibrahim Al Banna Advocates and Legal Consultants, who clarified what the UAE’s laws say regarding leave salary, temporary deduction of salaries during COVID-19 as well as how bonuses are viewed.

“As per Article 78 of the UAE Labour Law, an employee is entitled to receive his or her basic pay in addition to his or her housing allowance from his or her employer for the annual leave days. Simultaneously, an employer, as per Article 80 of the same law, is bound to pay its employee's remuneration in full before he or she departs for annual leave,” Al Banna said.

Temporary deduction of salary

Addressing the issue of a temporary reduction of salaries in 2020, Al Banna spoke about Article 2 and Article 5 of the ‘Ministerial Resolution No. 279 of 2020 Regarding the Stability of Employment in Private Sector Companies, During the Period of Applying Precautionary Measures to Contain the Spread of the Novel Coronavirus’.

Article 2 of the Resolution provides steps that a mainland company can take to reorganise its work structure, if it has been affected by COVID-19 related precautionary measures. Article 5 refers to the obligations a company needs to fulfil, if it is temporarily reducing the wages of a non-citizen employee. According to Article 5, a company needs to:

1. Conclude a “temporary additional appendix” to the labour contract between the two parties, according to the form attached with the resolution, provided that it expires with the expiration of the term of the contract or the period of validity of this resolution, whichever is earlier.

2. Renew the appendix referred to in Item 1 of this Article with the approval of both parties.

3. To prepare the appendix referred to in Item 1 of this Article in two copies, with each party keeping one of them. The employer shall submit it to the Ministry whenever requested to do so.

“To be more precise, MOHRE Ministry of Human Resources and Emiratisation (MOHRE) shall accept the aforementioned Temporary Additional Appendix only if it is signed by the employer and the employee. So, if your salary has been deducted by not complying with the aforementioned procedure in the Ministerial Resolution you are entitled to raise a claim for recovery of the deducted salary before MOHRE. The Ministry shall endeavour to arrive at a settlement between the parties. If the parties never arrive at a settlement, the aggrieved party is entitled to raise the said claim before the Labour Court,” Al Banna said.

“Speaking about bonus, the UAE Labour Law is silent about the payment of bonuses by an employer to the employee. Hence, the question of the payment of bonus is at the discretion of your employer, unless the employment contract specifically mentions payment of bonus along with the ascertained procedure for calculating and payment of bonus. Some companies, as a matter of custom or practice, do pay their employees a bonus. In such cases, an employee is entitled to raise a claim for payment of bonus,” Al Banna said.

“Precisely speaking, as stated earlier, if payment of bonus is a practice or custom of your employer, then you are entitled to raise a claim for payment of bonus as Article 1 of the Labour Law, which states that ‘Remuneration is whatever is given to the employee in consideration of his services under the employment contract, whether in cash or in kind, payable annually, monthly, weekly, daily, hourly, or by piece-meal or pro rata to the production or as a commission. The remuneration includes the high cost of living allowance, and any benefit given to the employee in reward for his honesty or efficiency, provided always that these amounts are prescribed in the Company bylaws or in the employment contract, or normally practiced or granted to the employees, until they have been regarded by these as an integral part of the remuneration rather than a donation.’”

“Hence, you are entitled to raise, along with the claims for aforementioned leave salary and deducted salary, a claim for recovering bonus against your employer before the Labour Court,” Al Banna added.