Abu Dhabi, UAEThursday 23 January 2020

'What are an employee's rights and pay when it comes to redundancy?'

The Dubai resident wants to understand the differences between arbitrary and non-arbitrary termination

If a termination is deemed arbitrary, an employee may be entitled to compensation of up to three months wages in addition to the standard payments due. Photo: Getty Images
If a termination is deemed arbitrary, an employee may be entitled to compensation of up to three months wages in addition to the standard payments due. Photo: Getty Images

I have a query about redundancy. How is arbitrary termination or dismissal different to non-arbitrary redundancy in terms of employee rights and pay? AM, Dubai

A termination is deemed arbitrary if it is not related to work or for financial reasons. Article 122 of UAE Labour Law describes it thus: “The termination of the employment of the worker by the employer shall be deemed arbitrary should the cause of termination not be related to the work, in particular should the termination of the employment of the worker be made by reason of the filing by the latter of a serious complaint before the pertinent authorities or a valid claim against the employer.”

If an employee is terminated and it is found to be arbitrary, then the employer may have to make an additional payment to the employee. This is covered in Article 123 of the law: “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.” It goes on to state that the provisions “shall not breach the right of the worker to the gratuity entitled thereto and the compensation in lieu of notice provided for herein”.

To clarify, an employee can claim an additional payment by way of compensation of up to three months wages if their termination is deemed arbitrary. This is in addition to the standard payments due on termination, including days of annual leave accrued but not taken, end-of-service gratuity if service is more than one calendar year and the standard compensation if on a limited-term contract.

My husband is changing his job and he is my sponsor. I am nine months pregnant and could deliver the baby at any time. I want to know if my husband resigns from his existing company, does my health insurance also get cancelled as his company provides the insurance? MQ, Abu Dhabi

Under the guidelines issued by the Abu Dhabi Department of Health, “when the visa is cancelled, transferred or the member leaves the country, the health insurance plan will be cancelled accordingly”. It is standard practice that employment-linked medical insurance is cancelled at the same time as the cancellation of a visa, at the end of the notice period. Assuming MQ’s husband moves to a new job, also in Abu Dhabi, his employer will need to provide medical insurance for him and his wife and up to three children but there is likely to be a short break while one visa is cancelled and another is put in place. Medical insurance plans must include maternity cover for married women although some have a waiting period.

It is, in theory at least, possible for MQ to take out her own plan but it would be expensive as a) she has to disclose the pregnancy and the premiums would reflect the immediate claim and b) plans are for a calendar year. It is always expensive for a woman who is already pregnant to take out personal medical insurance as the insurance company knows there will be claims and will price cover accordingly. A residency visa is also required to take out insurance with one of the approved providers.

In this situation, the sensible course of action would be for MQ’s husband to delay leaving the current employer until the baby has been born and all is OK. I hope all goes well.

I have lost my driving licence and it has also expired. Please advise what I need to do. SG, Dubai

Losing a driving licence is not a major problem and it can easily be replaced by contacting the Roads and Transport Authority (RTA) for a fee of around Dh120. If a licence has expired, that is a different issue entirely and it must be renewed to continue driving. There is no grace period for driving licences and driving without a current licence invalidates insurance and per Article 51 of the UAE traffic law, a person doing so can be fined up to Dh5,000 or imprisoned for up to three months or both.

Renewing a Dubai driving licence is straightforward. The individual needs to have an eye test at an approved optician and the optician can send this directly to the RTA. The licence can then be renewed online via the RTA website www.rta.ae or its app, or at one of the RTA outlets in seven shopping malls, or even via a few opticians that offer this full service. The fee is Dh320 and replacement licences are now valid for a period of five years. If a person is late renewing a licence, they can be fined Dh10 for each day over the expiry date so it is best to renew in good time.

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: December 7, 2019 03:37 PM

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