Stock Law court crime
Under UAE law, a bank does not have the right to file a case against a partner in a partnership firm, unless the partner holds the company's property in a fiduciary capacity or its profits or interests. Image Credit: Shutterstock

Lawsuit against partner in a limited liability company

Question: I am a partner in a limited liability company. A month ago, one of the banks filed a civil lawsuit against the company, the manager and against me — personally. Is the bank legally entitled to file a civil lawsuit against the company and include me personally in the lawsuit, given that I am neither a manager in the company nor a signatory to any document issued by the bank? Also, I do not have any idea about the transaction that the manager made with the bank. What is the appropriate legal action to get out of this problem and how do I prove to the court that I am only a partner and have nothing to do with the company’s financial transactions?

Answer: The bank does not have the right to file a case against you as a partner, unless you hold company property in a fiduciary capacity or its profits or interests. The partner in a limited liability company is not liable for its debts except within the limits of his or her share in its capital and not his own money. The company’s creditors may not direct their claims to the partners. A company of any kind — with the exception of a joint venture company — has a legal identity and a financial liability that are independent of the receivables of its partners, and it has the capacity to sue in its name.

It was decided in Dubai Higher Court of cassation No 377/2015 Commercial that A) A partner in a limited liability company — and similar companies established under the Freezone system — is not liable for its debts, except within the limits of his or her share in the firm’s capital. The creditors have no guarantee except from the company itself, without the personal debts of the partners, and that when the partner provides his or her share, he or she is safe from any claim against the company’s obligations, and it is not permissible for him or her to be held accountable for it, as he or she is not obligated to more than his or her share, as his or her liability is limited to that extent only. The company’s creditors may not direct their claims to the partners and return to them what is owed to them in the company’s custody.

The partner in a Limited Liability Company shall be held liable — according to Article 82 of the company’s law — for any property of the company held by such partner in a fiduciary capacity, profits or benefits he or she gains through the company’s business or activities or through utilising the company’s properties, name or commercial relations.

The same defence mentioned is the legal action that should be sought in court with the submission of the Memorandum of Association and all related documents that show your partnership and that you didn’t sign any document related to the company’s bank transactions.

Resignation from work

Question: I work in a private company. What are the penalties that an employer can rightfully impose on a worker? Does the employee have the right to object to these penalties? Does the employer have the right to refuse to accept a worker’s resignation and what is the appropriate action in this case against the employer? Also, how are overtime hours calculated?

Answer: Firstly, disciplinary penalties that may be imposed by the employer on the employees are according to Article 102 of the Labour Law, which are as follows:

A. Warning.

B. Fine.

C. Suspension from work with reduced pay for a period not exceeding ten days.

D. Forfeiture of deferment of periodic increment in establishments where such increment system applies.

E. Forfeiture or deferment of promotion in establishments where promotion system applies.

F. Dismissal from service, but reserving the right to end-of-service benefits.

G. Dismissal from service, along with forfeiture of all or part of the benefits, provided that penalties shall not be imposed for reasons other than those specifically prescribed in Article (120) of this Law.

Secondly, the employer has no right to reject a resignation and the employee has to continue working through the notice period according to the employment agreement and the decision of Dubai Higher Court that (the worker may, after announcing this to the employer, resign from work and this resignation shall be treated as termination of the contract by unilateral will and it shall be effective as soon as it is submitted — unless the worker continues to proceed with his or her work, following the orders of the employer). Cassation No 2020/21 Labour.

Read more

Finally, the number of hours of actual overtime must not exceed two hours a day, unless such work is essential for preventing a substantial loss or a serious accident, and in such cases, the worker shall be entitled to an additional wage equal to his or her wage for the normal working hours, plus an increase of no less than 25 per cent, if those hours are during normal daytime hours and an increase of not less than 50 per cent if those additional hours are between nine o’clock at night and four o’clock in the morning. Where a worker has to be put on duty on Friday, which is the official rest day, he or she shall be compensated with a substitute rest day or be paid his or her basic wage for his or her normal hours of work, plus a supplement of at least 50 per cent of that wage.