Abu Dhabi, UAEFriday 19 July 2019

'Do I have to pay a fee to reactivate my dormant bank account?'

The Filipina did not close her account before leaving the UAE and now has to pay a Dh361 charge

A bank's terms and conditions make reference to fees and these are assumed to be accepted when any person signs the paperwork to open an account. Getty Images
A bank's terms and conditions make reference to fees and these are assumed to be accepted when any person signs the paperwork to open an account. Getty Images

I have a problem with a UAE bank. I didn’t close my account before I left to go back to the Philippines two years ago as I thought the bank would automatically close it. I am back in Dubai as I have a new job. When I went to the bank to reactivate the account, I discovered I have to pay Dh361. I don’t want to pay this charge as I didn’t use the account after I returned to the Philippines. I want to close it and open a new account. What can I do? IM, Dubai

This is a salutary lesson. IM did not close the bank account when she left the UAE but many banks charge a monthly fee if the minimum balance is not maintained. Furthermore, a bank’s terms and conditions make reference to fees and these are assumed to be accepted when any person signs the paperwork to open an account. The bank’s general terms include this statement: “The bank, without referring to the customer, may deduct from the customer’s account expenses, fees or commissions payable against the banking services rendered to the customer according to banking fees and commissions regulations approved by the bank.”

The bank is well within its rights to charge a fee for maintaining the account as IM did not notify them that she was leaving and wanted to close the account. No bank account closes automatically and it is the responsibility of the individual to notify their bank of any actions required. IM needs to pay the money she owes to the bank and then tell them she wants to close the account if that is her required course of action.

I work under a renewed limited two-year contract and after one year I am planning to tender my resignation as I am going back to my home country to continue my studies. How much do I need to pay to compensate my employer? It is written in the contract that on termination of contract either or both parties will pay one month’s total wage. Will this be followed? If so, will I receive my gratuity for the previous year? CA, Dubai

Anyone on a limited-term contract, even if this is a second one, is liable to pay a penalty to their employer for breaking the terms of the contract. Article 116 of UAE Labour Law, which is largely adopted across all employment zones in the UAE, 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.”

An employer does not have to follow this, provided the employee is no worse off than under the minimum requirements, so a penalty equivalent to one month’s salary could be applied instead of the standard penalty that equates to 45 days’ pay.

In this situation as the total period of service is fewer than five years in total, no end-of-service gratuity will be payable. This is per article 139 of the law, which states that “the worker shall be deprived of his end of service gratuity … should he leave his employment of his own accord … prior to the completion of five years of continuous service with regards to contracts with determined term”.

I have been with my company for four years but I will be giving them notice to leave as I plan to return home after many years in the UAE. I have a fixed-term contract but will leave at the end. Before I speak to my boss, what I am entitled to? Does the company have to pay for my flight home? They have said no to other people who have left. TM, Abu Dhabi

TM works for a mainland company so UAE Labour Law applies in full. In respect to the cost of repatriation, article 131 of the law states: “The employer shall, upon the termination of the contract, bear the expenses of repatriation of the worker to the location from which he is hired, or to any other location agreed upon between the parties. Should the worker, upon the termination of the contract, be employed by another employer, the latter shall be liable for the repatriation expenses of the worker upon the end of his service.” The company is therefore liable for this cost as TM is leaving the country and not taking up further employment in the UAE.

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: July 6, 2019 10:03 AM

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