I am a physician qualified in lab medicine. I got a job in Dubai last year and signed a contract in November 2017. However, I was not given a copy of the contract. I started to get paid from January 1, this year. I was never told that the lab was under construction. From January to June, I was sitting at home, but getting paid. Since medicine is a regulated field I risked losing my licence if I did not practice. I decided to resign. My employer accepted my resignation on June 17 and paid me up to that date. I allowed him to continue using my pending approved licence from the Dubai Health Authority to finish constructing the lab. Later I found out that he continued to use the licence till August. My employer has now filed a labour complaint against me, which the Ministry of Human Resources and Emiratisation has forwarded to court. He claims that I have to pay him six months’ salary because I did not gave him six months’ notice as per the contract. Does the employer have the right to request a ban on me because I did not serve the notice period?
As per the UAE labour law, the questioner was obliged to give the employer notice and serve the notice period as per the employment contract. The questioner cannot be excused for not having the employment contract as he could get a copy of the contract directly from the ministry. Therefore, the court may ask the questioner to compensate the employer for non-commitment to the notice period if it finds that the employer’s claims are true. Finally, in case the judgement is in favour of the employer, he has the right to request the ministry to impose a ban on the questioner.
Is commission included while calculating end-of-service benefits? How is it calculated? Are the days of absence from work without pay included in end-of-service benefits?
As per article 132 of Federal Law No 8 of 1980, a worker who has spent one year or more in continuous service shall be entitled to end-of-service gratuity upon termination of his service. The days of absence from work without pay shall not be included in the calculation of the period of service, and the gratuity shall be calculated as follows:
21 days’ wages for each of the first five years of service.
30 days’ wages for every additional year provided that the aggregate amount of severance pay shall not exceed two years’ remuneration.
End-of-service benefits should be calculated according to article 134 as amended by Federal Law No 12 dated 29/10/1986 which states: Without prejudice to the provisions of certain laws on the pensions and retirement benefits granted to workers in certain establishments, end-of-service gratuity shall be calculated on the basis of the last wage due to monthly, weekly and daily-paid workers, and on the basis of the average daily wage set forth in article 57 hereof for the workers getting paid by piece. The wage used as a basis for calculating gratuity shall not include payments made to the worker in reimbursements, housing, transport and travel allowance, overtime pay, representation allowance, cashier’s allowances, children education allowance, allowances for recreational and social services, and any other bonuses or allowances.
Based on that any employee is ordinarily entitled to gratuity in the event of termination as long as he has the qualifying length of service (and is not being summarily dismissed).
Recently, the Dubai Court of Cassation ruled that gratuity calculation should be based on basic salary and, in addition, commissions or bonuses where such amounts are essentially fixed or guaranteed. Accordingly, there is now a risk for employers paying bonuses on a fixed or guaranteed basis that such bonuses may lead to a much larger obligation on termination than originally intended.
In order to seek to limit the potential liability for gratuity for employees who receive bonuses, it is advisable that performance indicators are utilised which, if not met, mean that the bonuses are not payable.