Question 1: We are two managers in an LLC company. We get paid a salary in addition to other allowances. Since three months, we have not received our salary as the company’s bank account is under a freeze by a court order. What legal recourse do we have to claim our pending salary and other allowances?
Labour cases in the UAE are governed by Federal Law No. 8 of 1980. However, Article (1) of the mentioned law defines the employment contract as “any agreement, whether for a limited or for an unlimited period, concluded between an employer and an employee under which the latter undertakes to work in the service of the employer and under his management or control against a remuneration payable to him by the employer.”
Article (3) of the same law says the law applies to all employees and workers in the UAE, including Emiratis and expatriates.
Therefore, it should be noted that the partners in a business are not considered as employees; instead they are treated as investors in their businesses. However, if you hold an employee position, additional to your status as a manager, you will be considered as an employee working in the company. For example, if the company sets your salary and other allowances, car expenses and annual leave for one month, based on this you will be entitled to your labour rights including an end-of-service gratuity
So for the parties in a business relationship, it is sufficient for the jurisdiction of the Dubai Civil Court, not the Labour Court, to hear the case.
Question 2: I have been working in a company based in Dubai for five years. The company is a free zone company. In my labour contract, it is mentioned that my salary is on a commission basis only. It is also mentioned that the employer is not entitled to pay end-of-service rights as long as I am working on a commission basis. As per the UAE Labour Law, do I have the right to get the end-of-service benefits in case I resign and leave the company? Do I have the right to request the court to force my employer to provide me with the end-of-service certificate because my employer is refusing to do so?
As per the UAE Labour Law, an employee who works on a commission basis has the right to get paid for end of service. Anything to the contrary is considered against the law.
As per the UAE’s Labour Law, Federal Law No (8) of 1980, Article No. 125, “An employer shall provide a worker at the latter’s request and on the termination of his contract, with a certificate of termination of service, which shall be free of charge; it shall specify the dates of his entering and leaving the employer’s service, his total period of service, the nature of the work he has performed, his last remuneration and any bonuses he has received.”
Therefore, as per the above-mentioned article, the employee has the right to request the labour court to force the employer to provide the employee with end- of-service certificate in case the employer refuses to provide the employee with such a letter.