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Change of management

Question 1: I have been working in an establishment for more than five years. The establishment has been sold to a new employer. The new employer now says my five years of service is null and void and cannot be considered for end-of-service benefits. What is my right as per the UAE Labour Law? In case I decide to resign, who will pay my end-of- service benefits?

Answer 1- Federal Labour Law No. 8 of 1980, Article 126 states the following: “Where a change occurs in the form or legal status of the establishment, contracts of employment that are valid at the time of the change shall remain in force between the new employer and the workers of the establishment, and their service shall be deemed to be continuous. Both the original employer and the new employer shall be jointly liable for a period of six months for the discharge of any obligations resulting from contracts of employment during the period preceding the change; after the expiry of this period the new employer shall solely bear liability.”

Therefore, the questioner may claim both previous employer and the new employer to pay him his benefits in case he decides to resign.

Selling of company shares

Question 2: I have held a share in an LLC company since two years along with other two partners. What is the procedure as per the law to sell the share? Can I sell my share to my son who is not a partner in the company? Does the law oblige me to sell my share to a partner only?

Answer 2: The Company Commercial Federal Law No.2 for t 2015, Article 80, concerns procedures of assignment of the partner’s share in the company. Its provisions are as under:

1. If a partner wishes to assign his share to a person who is not a partner, with or without consideration, such partner shall notify the other partners through the manager of the company of the assignee or the purchaser and the terms of the assignment or the sale. The manager shall notify the partners as soon as he receives the notice.

2. Every partner may demand to pre-empt the share as set forth in clause 1 of this Article within 30 days from the date of notifying the manager of the agreed price. In the event of dispute on the price, such a share shall be assessed by one or more experts with technical and financial experience in the subject matter of the share, as nominated by the competent authority on demand by the applicant for pre-emption and at his expenses.

3. If the right of pre-emption is used by more than one partner, the share(s) offered for sale shall be divided among such partners pro-rata to their respective shareholdings, subject to the provisions of Article (76) of this law.

4. If the period as set forth in Clause 2 of this Article has lapsed without use of the pre-emption right by a partner, the relevant partner shall be free to dispose of his share.