x Abu Dhabi, UAESaturday 20 January 2018

On Your Side: People's misfortune should not result in profits

Keren Bobker gives advice on takafal life insurance, your rights when it comes to dealing with faulty goods and employees' rights when a contract is terminated early.

My husband has recently arranged a mortgage for us and as part of the deal, the lender has arranged takafal life cover. I don't understand what the difference is and want to make sure that I am fully protected should something happen to him. Can you explain the difference? MS, Abu Dhabi

Takafal life cover, sometimes called Islamic life cover, is a form of assurance that complies with Islamic rules and is set up on a slightly different basis to the plans we are traditionally used to in the West. Islamic scholars object to the concept of conventional insurance because of three key elements: riba (usury), gharar (uncertainty) and maysir (gambling). It is still life assurance that pays out on the death of the life assured, but the companies that offer it are run in accordance with approved rules, usually on a similar basis to the original "mutual" insurance companies. The provider should not make a profit from people's misfortune, although it can collect fees, while the cost and profit should be shared among the policyholders. One issue that expats should be aware of is that many takafal policies will pay the proceeds of claims in the UAE. This means they are subject to Sharia law and it should be taken into consideration with overall financial planning.


I recently purchased a water fountain from Geant for Dh279. I returned the product because the water froze inside, preventing it from dispensing. It was under a one-year warranty. When I returned it, I was told I could not have a refund, could not have a replacement from the shop and had to wait for the original to be sent to the supplier, repaired and returned for me to collect. I was called to collect the repaired product, only to find that the fountain I was being given was at least six months or more old and covered in a sticky residue. It was obviously not the product I had brought in to be fixed. I again insisted that I receive a full refund. Following much discussion, I was told that my only option was to be given a credit note for the same amount to be spent on "electrical goods" in Geant. Could I have insisted on a full refund? I pointed out to the manager that Geant should change its customer-service signs because that was not what customers were getting. NW, Dubai

Under UAE Consumer Law (Federal Law no. 24) a store has a legal requirement to provide a remedy for defective products, either by repair, replacement or refund. If it is quite clear that the item is not working as it should through no fault of the purchaser, then Geant, as the supplier of the item, is responsible. I would expect a store of this size to provide an immediate replacement for an item such as this if it has one in stock, especially for something that is relatively inexpensive. It is unreasonable to expect a purchaser to be deprived of an item for weeks on end, nor is it reasonable to provide a replacement that is not in perfect condition. If the store was unable to provide a replacement within a reasonable time frame, then it should provide a full refund and not a limited credit note. This level of service from a major retailer is disappointing. I have attempted to contact Geant on the reader's behalf, but, unfortunately, its customer-service department has not returned my calls.


I have only been with my employer for nine months, but because of cash-flow issues in the business, he has decided to make some staff redundant. My contract has been terminated without notice and I was asked to leave the office immediately after being paid. The boss has said that he is not going to pay me the notice-period salary and that he does not have to. I was on a 12-month contract. He says that because I was there for less than a year, I have no rights and am not entitled to be paid. My contract says there is a notice period of one month. FB, Abu Dhabi

If an employee is on a limited-term contract, they are entitled to be paid for the remainder of the contract period. This should be their salary in full, plus any other payments due, provided the total does not exceed three months' salary or the remaining period of the contract, whichever is of a shorter duration. In this case, it will be a simple figure of three months' salary, per the labour contract. If the period of service is less than 12 months, an employee is not entitled to an end-of-service gratuity. I suggest that FB tells his employer that he has checked his legal position, but if the company continues to not comply, he should contact the Ministry of Labour (800 665), which will follow up the complaint.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com or onyourside@thenational.ae