x Abu Dhabi, UAETuesday 23 January 2018

Compensation may be in order for any arbitrary dismissals

On Your Side columnist Keren Bobker answers UAE readers' questions on unjust dismissals, British tax law and leave notices.

Keren Bobker answers readers' questions on workplace and consumer law. Silvia Razgova / The National
Keren Bobker answers readers' questions on workplace and consumer law. Silvia Razgova / The National

After two and a half years of servicemy employers dismissed me because of apparent restructuring. They promised three months salary in lieu of notice and I suppose the usual severance pay stipulated in the Labour Law. I am in the middle of my pregnancy and I have little, if any, prospect of getting a job before my due date, or even for some time afterwards on a permanent basis. Do I have a legal basis to argue that my dismissal was unjust and that I am entitled to longer than three months pay, especially as I will no longer receive any maternity pay? ML, Dubai

The law is not as clear as it might be in terms of reasons for termination and refers to a "valid reason". Article 122 of UAE Labour law states that "the termination of the employee's services by the employer shall be considered arbitrary if the reasons of termination did not relate to his work". If there is genuine reorganisation within the company, other people are also made redundant and the specific job done by ML is not taken by another employee, then she will not have a case. If, however, this is not clearly the situation, then she may have a case for arbitrary termination. Article 123 states: "If an employee was dismissed arbitrarily, the concerned court may order the employer to pay compensation to the employee. The court shall estimate this compensation according to the nature of the job and the damage caused to the employee, his service period, after investigating work conditions. The amount of compensation shall in all circumstances not exceed the employee's wages for a period of three months calculated according to the last wage he was entitled to."

In addition an individual is also entitled to payment for the relevant notice period and their accrued end of service annuity in full. In this situation, the onus would be on ML to demonstrate that her termination is arbitrary. She can approach the Ministry of Labour for advice and if she decides to take legal advice and/or go to court and wins, her legal and court costs would be payable by the employer.

I moved to Abu Dhabi 18 months ago and will be here for another couple of years. I have seen you answer questions on savings and tax issues in the United Kingdom and am hoping you can confirm something for me. I have not registered as non-resident with HMRC [Her Majesty's Revenue & Customs], although I am not paying any UK tax on my income at the present time. As I am a British citizen, and will be returning to the UK at some point, I'd like to use my annual allowance for the Individual Savings Account (Isa) before the end of the tax year [April 5], as I have done in the past, although I have heard conflicting information about what I am allowed to do. CL, Abu Dhabi

Under HMRC rules you must be resident and ordinarily resident in the UK for tax purposes to be eligible to invest in an Isa (a UK specific tax-efficient savings scheme) of any type. The only exception is for crown employees or military personnel and their spouses. Even if you have not formally notified HMRC that you are living abroad (by completing form P85), you should be deemed non-resident based on your circumstances and are not able to make any further payments until such time as you return to the UK and take up residency once again. Any Isa contributions that have been made while you have been non-resident should be refunded to you once you notify the providers of your status. Any Isa plans that you set up, and contributions that you made, before you became non-resident may continue and will retain tax-free status. If you return to the UK and become resident again you can restart contributions, subject to the annual limits.

I have resigned after completing two years service - with the resignation to take effect on April 20. My employer is not accepting a one-month notice period and wants three months. When I received my offer letter, it mentioned a three-month notice period, but the labour contract that I signed didn't mention anything about three months. My new employer is not willing to wait for three months. Is it legal for a company to insist that an employee serve a three-month notice period after two years of service? Can it ban me from working? AS, Dubai

AS is on an unlimited contract so may leave employment by simply giving formal notice. As his contract of employment, the one that was lodged with the Ministry of Labour, refers to a notice period of one month, in accordance with the period set out in UAE Labour Law, Article 117, that is valid and his employer should comply. Where there is a dispute/discrepancy between the official contract and company contract, the courts tend to rule in favour of the contract most favourable to the employee. As he will have been employed for two years, he will not be subject to an employment ban upon leaving.


Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com