Compensation for dismissal should be based on full salary

I was working with one of the prestigious private developers for 15 months till last November. The company went through a bad phase and more than 500 of us were laid off as a part of internal restructuring, nothing to do with performance actually. We were told that. The company said we would be compensated for three months. We received a settlement figure from the company over email and it seemed fine. But now the company says that they will pay only the basic and not the whole salary. Our salary is broken up as basic Dh11,000, house rent allowance of Dh4,000, transportation allowance of Dh2,000, furniture allowance of Dh1,000, and a monthly bonus (paid quarterly) of Dh2,000. My total salary was Dh18,000 per month and an additional Dh6,000 at the end of every three months. We have statements, saying that the compensation was a total of Dh18,000 per month. But now the company says that it will reimburse only the basic salary of Dh11,000 per month, which is quite shocking as the company claims that the figure arrived upon is in keeping with the labour law. I had signed a three-year limited contract in September 2007 and my salary then was Dh10,000 per month plus Dh3,000 bonus, payable at the end of every three months. Since then, I got a raise twice, but have not signed any new contract. Kindly clarify if this will make a difference in the final settlement. I have a copy of the salary slips and bank statements as proof of my salary, along with the revised salary letters as proof of increments.

The Ministry of Labour as well as the provisions of the court state that the compensation for arbitrary dismissal shall be calculated on the basis of the basic salary, along with all allowances, that is on the salary in full.

The said calculations shall be made on the basis of the last salary received, as long as the retrenched employee can prove the receipt of the last salary - either through a receipt voucher or alternatively through a bank statement showing salary credit.

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