I work in Abu Dhabi. Does an employer have the right to punish an employee for misbehaviour by reducing his salary without his approval? In what cases is the employer entitled to deduct salary?
I would like to clarify that if the employer wants to reduce an employee’s salary, they should enter into a fresh employment contract signed by both parties and it needs to be submitted to the Ministry of Human Resources and Emiratisation for approval.
Article 60 of the Federal Law No. 8 of 1980, regulating employment relations in the UAE (or the ‘Employment Law’) states: “No amount of money may be deducted from an employee’s remuneration in respect of private claims, except in the following cases:
(a) The recovery of advances or amount of money paid to the employee in excess of his entitlements, on condition that the amount deducted in this case does not exceed 10 per cent of his periodic remuneration
(b) Contributions which the law requires the employee to pay from his remuneration, e.g. towards social security, insurance schemes
(c) The employee’s contributions to a savings fund or repayment of advances repayable
(d) Contributions towards any welfare scheme or in respect of any other privileges or services provided by the employer and approved by the ministry
(e) Fines imposed upon the employee for any offence made
(f) Any debt payable in execution of the judgement of a court ...
Provided the deduction shall not exceed one-quarter of the employee’s remuneration. Where two or more debts are payable, the maximum shall be half the employee’s remuneration and the sums of money attached shall be divided pro rata among the beneficiaries, after payment of any legal alimony at the rate of one-quarter of the employee’s remuneration.”
Due to non-compliance of the provisions of the aforesaid article of the Employment Law, your employer may not reduce your salary.
How is gratuity calculated?
I live in Dubai. A month ago, I resigned after working in a company for more than five years.
Given my service tenure, am I entitled to include house allowance and overtime pay while calculating my end-of-service benefits? My labour contract states that the employer is required to pay for the employee’s air ticket home only at the time of annual leave. In my case, am I allowed to factor in the air ticket fare while calculating my end-of-service benefits?
Article 134 of UAE Labour Law No 8 of 1980 stipulates that without prejudice to what is provided for by some laws on the granting of pensions or retirement benefits to employees in some establishments, severance pay shall be calculated based on the remuneration last due to the worker for those who are paid monthly, weekly or daily basis and on the average basis of the daily remuneration referred to in article 57 of this law for those who are paid on piece rate basis.
The remuneration, used as a basis for the purpose of calculating severance pay, shall not include what is given to the worker in kind, and housing allowance and transport and travel allowances, overtime pay, representation allowances, cashier’s allowances, children education allowances, for recreational and social facilities and any other allowances or increments.
Therefore, as per the above-mentioned article, house allowance and overtime pay is not included while calculating the end-of-service, even if the employee worked for more than five years.
Finally, the employee — as per the Dubai Supreme Court — is entitled to an air ticket at the time he leaves the job, as long as he is not joining another employer.
Questions answered by advocate Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants.