Gratuity Calculation
Question 1: A questioner from Dubai asks: I’ve been working for a company for more than two years, last week I submitted my resignation. I would like to know how the end-of-service gratuity is calculated and whether it is calculated on the basic salary plus commission and overtime hours and whether the said salary is calculated as per the employment contract mentioned salary or the current salary.
Answer 1: Article no 134 of the Federal Labour Law No 8, 1980 states the following: “Without prejudice to the provisions of laws that grant pensions or retirement benefits to employees in certain firms, severance pay shall be calculated on the basis of the wage last due for monthly, weekly and daily paid workers, and on the basis of the average daily wage referred to in Article 57 hereof for those paid on piecemeal. The wage used as a basis for calculating severance pay shall not include whatever is given to the worker in kind, housing allowance, transport allowance, travel allowance, overtime pay, representation allowance, cashier’s allowances, children’s education, UAE Labour Law 29 allowance, allowances for recreational and social facilities, and any other bonuses or allowances”. So as per the article mentioned only the current basic salary will be calculated.
Forceful Transfer
Question 2: I have worked in an establishment for more than two years. My employer is now asking me to transfer to another affiliated establishment. The new establishment he wants me to go to involves a different activity and different trade licence. Also it has a salary and a position lower then the one mentioned in my labour contract. If I fail to respond to my employer he will dismiss me from work as stated by him in a warning letter. Is the employer entitled to ask the employee to transfer to another establishment without his consent and with a position and a salary lower than the existing one? If I refuse such a transfer and am dismissed is this considered arbitrary dismissal?
Answer 2: As per the labour court the employer is not entitled to transfer the employee to another establishment owned by him unless the employee consents. The new job should also be the same standard of the existing job or superior and there should not be any reduction in salary. Therefore, if such a violation has been made by the employer it will be against the law and such a dismissal may be deemed an arbitrary dismissal.
Job Transfer
Question 3: Questioner from Dubai asks: I have worked for a company for more than three years; presently, I have a better job opportunity with another company for a salary and entitlements better than mine. My current contract is for an unlimited period and provides for a three-month notice period. If I submit my resignation am I entitled to work the notice period, is it against the Labour Law if I don’t work the notice period? Is it possible to compensate the employer instead of working the said period? I have read a clause in the UAE Labour law which says that the work relationship is deemed terminated once the resignation is submitted? It is also mentioned in the Labour Law that the notice period is one month only.
Answer 3: In accordance with the Labour Law if the employee, who is under a contract for an unlimited period, wishes to submit his resignation from work, in this case, he shall give notice to the employer and shall work within the agreed period if so required by the employer. That is the Labour Law obliges the employee to work within such a period and the latter is not entitled to refrain from working within such a period, otherwise he will be acting contrary to the Labour Law and be subject to a penalty, but he may leave work immediately if the employer allows him to do so. The contract shall remain in force until the end of the notice period in accordance with article no 118 of the Federal Labour Law no 8, 1980. As per the law, the notice period is one month and may be agreed to increase the same, it may not be decreased.
Ask the Law questions are answered by Advocate Mohammad Al Shaiba of Al Shaiba Advocates and Legal Consultants
