Abu Dhabi, UAEWednesday 17 July 2019

'Am I entitled to a full gratuity for a job that started on a temporary contract?'

The Dubai employee switched to a full-time role after a year of working for the company

The employee has worked for the company for six year. Getty Images
The employee has worked for the company for six year. Getty Images

I am resigning from my job next month after six years at the company. When I started in May 2013, I was brought in on a temporary basis. The contract ran until November 2013, when I was then offered full-time employment on an unlimited contract. I started with a two-year visa, which was renewed as and when required. By the time the unlimited contract was drawn up and signed it was April 2014, although the offer was made in November 2013. My company considers my start date as April 2014 but I have been working continuously, directly under their sponsorship, from May 2013. Am I entitled to six years of gratuity or just five? TN, Dubai

The official start date of someone’s employment in the UAE is the date their visa application and contract are registered with the Ministry of Human Resources and Emiratisation (MoHRE). If working on a temporary basis, assuming a person has their own visa, no benefits are payable. TN has clarified that he was sponsored by the company from when he started work, so under UAE Labour Law that makes him a sponsored employee and therefore entitled to the protections and benefits. He has been sponsored by the company for the full period of his service, so his start date for benefits is May 2013, irrelevant of the type of contract he was on at different times.

When he changed from a fixed term to an unlimited contract his visa was unchanged. This situation, where a fixed contract ‘rolls’ into an unlimited one, is not unusual and is considered to be continual employment. TN is therefore entitled to a gratuity payment based on his current basic salary and service from May 2013.

I have worked for a Dubai company since February 2018 but due to family issues I can’t continue and need to return home. I am on a limited term contract and want to break it this month. What are the UAE rules regarding the penalty and compensation I have to pay my employer. Will I be able to leave as my employer can be difficult? AS, Dubai

AS works for a mainland company and therefore UAE Labour Law applies in full. This means if he breaks the provisions of a fixed-term contract, Article 116 applies. This states: “Should the contract be rescinded by the worker … the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract, provided that the amount of compensation does not exceed the wage of half a month for the period of three months, or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.” This is equivalent to 45 days of salary as a penalty.

Notice should also be given to the employer in accordance with the contract terms and this is usually 30 days, unless stated otherwise.

No employer should ever refuse to accept the resignation of an employee, no matter how inconvenient. They also cannot prevent an employee from leaving service. If any difficulties are encountered, AS should contact his local Tasheel office or the main office of the MoHRE on 800 66473.

I am getting married in the summer and returning to the UAE next academic year. My future wife and I work in different schools. She has been given a one-bedroom apartment as part of her allowance but my school says we cannot have two allowances. Instead they will increase mine and she must forfeit hers. Are there any laws that say we cannot get two allowances as we both have international contracts? PH, Abu Dhabi

It is common in the education sector for employers to insist only one housing allowance is payable to a married couple, even if this seems an outdated and unfair concept. There is nothing in UAE Labour Law that makes any reference to allowances in this way but it is a matter of practice. In most cases, it will be covered in the employment contract signed by both parties and in the company handbook. If this is in a contract, and has been accepted by the employee, it is enforceable.

If there is nothing in writing to this effect, then I would argue that the school is acting unfairly and what a spouse receives is not the business of the other party’s employer. If this is a Government school, recourse is with management only, but with a private school the matter can be escalated to the MoHRE as an unauthorised change to contract terms. This can only happen if there is no mention of this provision in any employment documents.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 25 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only

Updated: June 22, 2019 10:42 AM

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