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Question: As per the UAE labour law what type of penalty is the employer allowed to impose on a worker in a disciplinary case?

Answer: As per UAE Federal Law No. (08) Of 1980, Article No. 102:

“The disciplinary penalties that an employer or his representative may impose on the workers are as follows:

1. A warning;

2. A fine;

3. Suspension from work with reduced pay for a period not exceeding 10 days;

4. Forfeiture or deferment or a periodic increment, in establishment having an increment scheme;

5. Forfeiture or promotion, in establishments having a promotion scheme;

6. Dismissal without prejudice to severance pay;

7. Dismissal with forfeiture of all or part of the severance pay. This penalty may only be imposed on the grounds expressly specified in the Article 120 of this Law.

Question: I have worked in a company in Dubai for four years, my question is:

a) Does the UAE labour law allow the employer to reduce the employee’s salary?

b) In case the employee takes a loan from the company, as per the UAE labour law what percentage is the employer meant to pay back monthly?

Answer: As per UAE Federal Law No. (08) Of 1980, Article No. 60:

“No amount of money may be deducted from a worker’s remuneration in respect of private claims, except in the following cases;

a) The recovery of advances or amount of money paid to the worker in excess of his entitlements, on condition that the amount deducted in this case does not exceed 10 per cent of his remuneration;

b) Contributions which the worker is required by law to pay from his remuneration, e.g. towards social security and insurance schemes;

c) The workers contributions to a savings fund or repayment of advances repayable thereto;

d) Contributions towards any welfare scheme or in respect of any other privileges or services provided by the employer and approved by the Labour Department;

e) Fines imposed upon the worker for any offence he has committed;

f) Any debt payable in execution of the judgement of a court of law;

The deduction shall not exceed one-quarter of the workers remuneration. Where two or more debts are payable, the maximum shall be half the workers remuneration and the sum of money attached shall be divided pro rata among the beneficiaries, after payment of any legal alimony at the rate of one-quarter of the workers remuneration.”