Question: I have been working in a bank for two years and according to the performance reports for me are excellent. Two months ago, I asked my bank a loan for a five-year payment. Last month the bank terminated my services. It was a huge shock to me. My question is, am I legally obligated to pay this debt, and how did the bank give me the loan while it knows the subject of terminating my services, knowing that the end of service dues are not sufficient to pay even a quarter of the debt’s value? Please advise according to the labour law. Can I file a civil lawsuit against the bank regarding debt and compensation for damages of arbitrary dismissal?
Answer: Regarding the loan, the law doesn’t prevent the bank from giving you a loan at any time according to its own considerations. Termination was not a well-known thing to the bank nor something you can prove against. You are requested to return the loan back even if your end of service dues are not enough. Payment will be according to the conditions agreed upon between both of you. It is decided that “if the bank agreed with its customer to lend him an amount of money or to record it on the credit side of his current account, then the borrower is obligated to pay the loan amount on dates and according to the conditions agreed upon”.
The bank will use its rightful claim for refund of this loan through filing a separate case directly to the court or through settlement depending on your cooperation and payment as per the schedule agreed upon or through interfering in a case already filed by the employee for his dues. It is decided that “If the worker has submitted a request to the competent Labour Department to claim his labour dues before the employer and the department has referred them to the court after the friendly settlement between the two parties was not possible, this is a sufficient measure to accept the lawsuit directly in the court as the employer has the right to raise his counter request to claim the loan granted to the employee and its interest and his request is then acceptable”.
You cannot file a civil case but a labour case requesting the compensation for arbitrary dismissal as well as any other labour dues. A worker’s service shall be deemed to be arbitrarily terminated by his employer if the reason for termination is irrelevant to the work.
Article 123 of the federal labour law states that “1. Where a worker is arbitrarily dismissed, the competent court may order the employer to pay him a compensation, to be assessed by the court with due regard to the nature of the work, the extent of damage sustained by the worker and his period of service, and after investigating the work circumstances, provided that such compensation shall in no case exceed the worker’s wage for three months, calculated on the basis of his last wage. 2. The provisions of the preceding paragraph shall not prejudice the worker’s right to the gratuity he is entitled to and the compensation in lieu of notice provided for in this law.”
Notice period after termination
Questioner from Dubai asks: I work in a company for more than three years. One month ago, my company terminated my unlimited labour contract with unfair termination. My company insists that I must work for a notice period for two months as per my labour contract. I left the company immediately and did not work for a notice period. My company via email still requesting me to work for a notice period. My questions are 1) As per UAE Labour Law, does the employee who has been arbitrary terminated must work for a notice period? 2) In case the employer sent the termination via email to the employee and the employee doesn’t reply and approve for the termination, Will it be considered legal and valid as per UAE Labour Law? Please advise.
Answer: Article No. 117 of UAE Labour Law No. 8 of 1980 mentions the following:
a) Both the employer and the employee may terminate a contract of employment of unlimited period duration for a valid reason at any time following its conclusion by giving the other party a notice in writing at least 30 days before the termination.
b) In case of workers working on a daily basis the period of notice shall be as follows:
1) One week, if the worker has been employed for more than six months but less than one year.
2) Two weeks, if the worker has been employed for not less than one year.
3) One Month, if the worker has been employed for not less than five years.
Therefore, as per the above mentioned article, the employee, upon the employer’s request, must work for a notice period even if his termination was unfair and arbitrary.
The termination sent via email to the employee considered valid and legal and does not required employee approval as per the UAE Labour Law.