Abu Dhabi, UAEWednesday 17 July 2019

'Can my employer keep my basic salary low to avoid a high gratuity payout?'

The Abu Dhabi employee says her basic pay has never increased despite rises in her overall monthly wage

The employee has been asked to sign a disclaimer giving up the benefit. Getty Images
The employee has been asked to sign a disclaimer giving up the benefit. Getty Images

I have been working as a sales manager for a small business in Abu Dhabi for the past four-and-a-half years. My monthly salary is Dh7,500 with the basic just Dh1,500 per month. The basic salary has been the same since I joined the company in June 2014. I was informed by a colleague that the company keeps the basic salary the same throughout the employee's career in the company with all increments allocated towards 'other allowances'. Is this a fair practice and if not, what are my chances of winning a case against the company in the Labour Court if I resigned and received an unfair gratuity amount? CC, Abu Dhabi

It is an unfair practice by the company, designed to keep their end-of-service-gratuity liability as low as possible. There is nothing in UAE Lab­our Law that specifies the split between basic salary and allowances, so it is at the discretion of the company. The gratuity is calculated on the final basic salary, so companies should not keep this artificially low to reduce their future liabilities. The general expectation is a basic salary is not be less than 60 per cent of the total. If it is less than 50 per cent, however, the employee would have a strong claim for unfair treatment with the Labour Court if they choose to challenge it.

I recommend CC seeks advice from the Ministry of Human Resources and Emiratisation without delay to obtain their view on the situation and how they would expect any case to be dealt with. They can be contacted via any of the Tasheel offices or via the helpline, number 800 66473.

I have a question regarding gardening leave. Can you clarify if an employee accrues annual leave if put on a notice period by the company? FA, Dubai

An employer can put someone on ‘gardening leave’, where they see out their notice period without actually working, but the individual remains an employee of the company until the end of the full notice period. During this time all benefits must apply as normal and annual leave continues to accrue until the end of service when the visa is cancelled.

I work in a restaurant in Dubai and our managers are unfair to the staff. There are no days off and overtime has not been paid properly yet. I have already received a job offer but my current employer has changed my status from visit visa to employment visa, however, the medical and stamp of residency on my passport has not been done yet. If I quit this job, will I get a ban? Will I need to pay them for the visa expenses? LG, Dubai

The employer is breaking the law in terms of the days being worked. The law specifies that everyone is entitled to at least one day off a week. Article 70 states: “Friday shall be the ordinary weekly rest for all workers with the exception of the daily worker. Should the circumstances require that the worker work on this day, the worker shall be entitled to a substitute rest day, or to the basic wage for the ordinary working hours in addition to 50 per cent at least of the said wage”. It is therefore very clear that everyone must have one day off work each week. In fields such as hospitality it is common for employees to work over a weekend but they must have a day off to compensate for this.

It is common to get a six-month employment ban if resigning at this stage while on a fixed-term contact. This can also apply if the employee is on a low wage on an unlimited contract, unless there is agreement from the MoHRE that the employer has broken the law. This is set out in Article 121: “The worker may leave work without notice in the following cases: a Should the employer breach his obligations towards the worker, as set forth in the contract or the law ...” Not allowing any days off is a breach of the law to me. A delay in paying overtime pay that is due is also wrong and another breach.

It is unusual for an employment visa to be entered in a passport without a medical examination having taken place, so this sounds irregular and should be queried. Also, no employer is ever permitted to pass on the costs of employing anyone, no matter the circumstances. This was set out in Ministerial Order 52 of 1989, Article 6 which makes it clear that all expenses incurred in taking on an employee must be borne by the employer. LG should contact her local Tasheel office or the MoHRE to obtain support.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 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: March 9, 2019 09:45 AM

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