Abu Dhabi, UAESunday 31 May 2020

'How do I calculate my employee's gratuity payment?'

The employer is closing a department and wants to process the correct end-of-service benefit for the terminated staff member​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

The Abu Dhabi employee resigned from her job in January and completed her last day on March 20. The National
The Abu Dhabi employee resigned from her job in January and completed her last day on March 20. The National

What would the gratuity payment be for an employee who has completed four years and nine months of service, leaving at the end of February. He has a basic salary of Dh9,000 per month as well as allowances for housing, transport and an air ticket that come to Dh5,000. The employee is on an unlimited contract and we are terminating his employment as we are closing a department. PK, Abu Dhabi

If the employee has completed more than one year of service and fewer than five years of service, including their notice period, then they are entitled to 21 days of pay per year of service on a pro rata basis. This is in accordance with UAE Labour Law, Article 132, which states: “The worker having spent one year or more in continuous service shall be entitled to an end-of-service gratuity upon the termination of his service. The days of absence from work without pay shall not be included in the calculation of the period of service and the gratuity shall be calculated as follows: 1. The wage of 21 days for each of the first five years of service. 2. The wage of 30 days for every additional year.”

This, however, is based on the final basic salary and the allowances mentioned are not taken into consideration for the purposes of this calculation. In this instance, assuming there are no days of absence or unpaid leave to be taken into consideration, the employee is entitled to a payment based on 101.4 days of their current basic salary being Dh30,420.

This calculation is used for employees in both mainland and free zone companies with the exception of Dubai International Financial Centre which now has different rules.

I have been suspended from my job for nearly two months, due to a disagreement in the workplace. I live in Dubai with my husband so we are managing but before I make a complaint, is my employer allowed to suspend me for an indefinite period or is there a maximum time permitted? I do not know the law in the UAE and do not know what to do about it. What are my rights? ML, Dubai

UAE Labour Law applies in this case and this sets out rules in relation to disciplinary action. RL has not disclosed the reason for her suspension but the permitted reasons are covered in Article 112, which states: “The worker may be temporarily suspended from work upon the charging thereof of a deliberate crime against life, property, honour, honesty or of carrying out a strike. The suspension period shall commence on the date of the notification of the incident to the competent authorities and until the issuance of a decision thereby in such regard. The worker shall not be entitled to his wage during the said suspension period. Should a decision be issued for the non-prosecution or the acquittal of the worker, the latter shall be reinstated and paid the full wage for the suspension period, should such suspension be arbitrary from the employer.”

Article 102 of the law states: “The disciplinary rules that may be inflicted by the employer or the representative thereof shall be: 1. warning. 2. fine. 3. suspension with reduced pay for a period not exceeding 10 days …”

Therefore an employer is not permitted to suspend an employee for two months as in this case. The employer has a one-day period to decide on the course of action to be followed, whether it is reinstatement or dismissal. The employer is breaking the law and the employee must be paid for the period in question. I suggest ML makes a case against the employer with the Ministry of Human Resources and Emiratisation although it is often wise to point out the law to an employer first as they take action to properly resolve it to the satisfaction of all parties.

I found an old record book from a UK building society that was last used over 20 years ago and there was a bit of money in there. Is there a way to find out where the money is now, assuming it still exists, and how I can get access to it? I don’t know where to start. KW, Dubai

This account was with the Heart of England Building Society (an organisation similar to a bank) that was taken over by the Cheltenham & Gloucester Building Society in 1993 and subsequently acquired by Lloyds Bank in 1995. Lloyds in the UK should be able to trace the account although it may take some time.

Anyone wishing to trace an old UK bank account can use a service run by the British Bankers Association called My Lost Account (www.mylostaccount.org.uk/). It is comprehensive, but for older accounts the recovery process can take up to three months.

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: February 29, 2020 01:23 PM

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