My company has changed hands and new owner has cut my salary. Is this legal?
Provisions of UAE Labour Law explained to deal with the situation
Question 1: I have been working with a private company for six years. A month ago, the owners sold the company. The new company owner now wants to reduce my salary, knowing that my contract expires in December 2024. Does he have the legal right to do this? If I submit my resignation, does the new employer have the right to refrain from paying my labour benefits for the previous years?
Answer: The new employer doesn’t have the right to reduce your salary without your consent or to refuse to pay your end-of-service benefits from the date of commencement of work, because your contract shall be effective with the same terms and the employer shall abide by these terms according to Article 48 of Labour Law No. 33 of 2021.
Employment contracts in force at the time of a change in the form or legal status of the establishment shall remain effective, and the new employer shall be responsible for implementing the terms of those contracts, in addition to implementing the provisions of this decree by law and its executive regulation and the resolutions issued in implementation thereof, as of the date of amending the establishment’s data with the competent authorities.
In addition, Article 1 and application of the provisions of the law define continuous service as the uninterrupted service with the same employer or his legal successor from the date of commencement of work.
This means that the employment contracts in effect at the time of change remain in place despite any change in the form of the establishment or its legal status, and in this case, the service is considered continuing by force of law from the time the employee worked for the previous employer. You have to file a labour complaint against the new employer to avail your rights.