Abu Dhabi, UAESunday 12 July 2020

'My gratuity payment is delayed. Is that allowed?'

The UAE resident has been asked to wait two months for her end-of-service benefits

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

I worked for a free zone company for three years and my last working day was on March 20. I resigned in January and served a two-month notice period. To date I have not received my end-of-service gratuity. I was working on my husband’s visa and handed my labour card back to the company on my last day. I then received my salary for the days I worked in March and an email containing details about the gratuity amount. The email also asked for two months to pay me what is due. When should a gratuity payment be paid by an employer and what can I do in this case? ML, Abu Dhabi

Free zones are not generally governed by UAE Labour Law but each free zone authority has its own employment law. Employees are then subject to the rules and regulations of their respective free zone authority. In most cases these are almost identical with UAE Labour Law but any queries or complaints are usually directed to the free zone itself, not the Ministry of Human Resources and Emiratisation (MoHRE).

The law does not specify when a gratuity and other final benefits should be paid. However, the expectation is for this to happen at the time of the ­final salary payment and when the residency visa or labour permit, if sponsored by a spouse or father, is cancelled. The employee is asked to sign paperwork confirming they have received all that is due to them before the visa or permit cancellation. This takes into account the salary, the gratuity payment and any days of annual leave accrued and not taken.

An employee should therefore be paid on the last day of work with the visa or permit cancelled immediately after. If anyone signs to say they have received all payments due when this has not happened, they weaken their case against a non-paying employer.

Many companies are experiencing financial issues at the moment so this employer may have a problem paying what is owed. ML can request a postdated cheque or written confirmation that payment will made on a specific date. ML can also escalate the issue to the relevant body – either the free zone itself with its own dispute resolution processes or directly to the MoHRE.

My employer has insisted on laying me off because my job role does not exist anymore due to the current state of business. My position is essentially in business development. I offered to go on unpaid leave or take a 25 per cent pay cut by reducing my days from four days a week to three, however, this was refused. At the same time, the chief executive has publicly expressed an exponential growth in sales. I plan to contest the reasons for dismissal. Before I do, however, is my employer covered by the current business climate? GF, Dubai

It is understood that GF works for a mainland employer and so UAE Labour Law applies in full. It has been made clear by the authorities that simply stating coronavirus as a reason for redundancy is not acceptable and that specific steps need to be followed if this is actually the case.

An employee needs to have been offered alternatives, which are working from home, taking annual leave, taking unpaid leave for a specified period and a reduction in salary for a specified period. If none of these options are acceptable, an employee can then be made redundant in accordance with standard procedures.

In this case, it appears the reason is not due to the virus. I am aware this e-commerce company is busy at the moment, as public comment from the chief executive demonstrates. Therefore, I agree that GF has a good case for unfair dismissal as the employer has not followed government guidance. This is covered in Article 122 of UAE Labour Law which states: "Termination by the employer of an employee’s service is considered arbitrary if the cause for such termination has nothing to do with the work." Article 23 goes on to say: "Should the worker be arbitrarily dismissed, the competent court may order the employer to pay a compensation to the worker. The court shall assess such compensation, taking into account the type of work and the extent of damage incurred to the worker as well as the duration of employment and after the investigation of the work conditions. In all cases, the amount of compensation shall not exceed the wage of the worker for a period of three months calculated on the basis of the last due wage.” GF can register a case against the employer with the MoHRE.

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: April 18, 2020 08:31 PM

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