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LEGAL ARTICLES

By Suneesh | May 2 , 2020 | 01

An employer may reduce the salary of the employee temporarily or permanently if affected by the current Covid-19 crisis. This is in accordance with Article 2 (4) & (5) of the Ministerial Resolution which states: “Establishments affected by the precautionary measures referred to above, who wish to reorganize its employee relations, shall take the following measures gradually, and in agreement with the non-national employee

4. Temporarily reduction of salary during the mentioned period

5. Permanent reduction of salary.”

Article 5 of the Ministerial Resolution allows an employer to reduce the salary of an employee and states the procedures to do so. Establishments that wish to temporarily reduce the salary of a non-national employee during the mentioned period shall take the following actions:

1. Conclude a ‘Temporary Additional Addendum’ to the employment contract between both parties, in accordance with the template attached to this Resolution, provided that it shall expire at the end of its term or enforceability of this Resolution, whichever comes first.

2. Renewing the Addendum referred to in Clause 1 of this Article shall be in agreement between both parties.

3. The Addendum referred to in Clause 1 of this Article shall be executed in two copies, each party holding a copy, and the employer shall commit to present it to the Ministry whenever asked.

By Suneesh | April 6 , 2020 | 01

Contract types

A limited or fixed term contract is where the employee agrees to stay with the company for a certain number of years with a set end date. Resigning before the end of this period could mean one or all of these; a labour ban, loss of labour rights or even payment of compensation to the employer.

An unlimited contract has no such period clause or number of years, and therefore, has no end date. However, a notice period of one to three months is applicable for termination of contract from either side.

Gratuity pay is calculated based on your basic wage/salary paid into your account without additional allowances or bonuses.

Article 134 of the Labour Law clarifies what this constitutes:

“The wage used as a basis for calculating the end of service gratuity shall not include payments made to the worker in reimbursements, housing, transport and travel allowance, overtime pay, representation allowance, cashier’s allowances, children education allowance, allowances for recreational and social services, and any other bonuses or allowances.”

No gratuity pay?

If you are terminated from your job, unless you break the rules as stated in Article 139 of the Labour Law, the employee is still entitled to gratuity pay. The rules in this article state:

The employee shall be deprived of his/her end of service gratuity in the following two cases:

a – If he or she is dismissed from service for any of the reasons set forth in Article 120 or if he or she quits employment in view of avoiding the dismissal in accordance with the article. (This article deals with dismissal during or at end of probation, or due to charges of material loss, failure to perform basic duties even after a warning, interrogation, crime etc.)

b – If he or she resigns without notice in cases other than the ones set in Article 121 (if employer breaches contract or in case of assault), and such with regards to unlimited contracts, or prior to the completion of five years of continuous service in limited contracts.

Calculations for Limited Contract gratuity pay

Less than 1 year of service

Leaving work before completing one (1) year of service means that you are not entitled to any gratuity pay.

Between 1 year and 5 years of service

Employee is entitled to full gratuity pay based on 21 days salary for each year of work.

5 or more years of service

Employee is entitled to full gratuity pay based on 30 days salary for each year of work.

Calculations for Unlimited Contract gratuity pay

Less than 1 year of service

Leaving work before completing one (1) year of service means that you are not entitled to any gratuity pay.

Between 1 year and 3 years of service

Employee is entitled to one third (1/3) of the 21-days gratuity pay.

Between 3 years and 5 years of service

Employee is entitled to two thirds (2/3) of the 21-days gratuity pay.

5 or more years of service

Employee is entitled to full 21-days gratuity pay for each year of service.

Formula

1. Basic salary ÷ 30 = Daily wage

2. Daily wage x 21 = 1 year gratuity figure (Or x30 if applicable)

3. 1 year gratuity figure x years of service = Total gratuity owed

Only continue for Unlimited Contract calculation

4. Total gratuity owed ÷ 3 = One third (1/3) of total gratuity

5. Either take this figure (between 1 and 3 years) or multiply it by two (between 3 and 5 years)

6. For over 5 years, total gratuity owed will be payable.

By Suneesh | February 15 , 2020 | 01

Voluntary liquidation can happen when shareholders decide to end business activity, a resolution must be passed to begin the process and a liquidator has to be appointed.

Steps and procedures for cancelling Limited Liability Company in UAE. will be according to the Federal Law No 2 of 2015 on commercial companies law , articles from 306 to 326

First: Notice of Company’s Dissolution & Appointment of a Liquidator:

  • Submission of Registration & Licensing Application Form
  • Duplicate of official document showing dissolution of the company, appointment of a legal liquidator and mentioning his name and determining the method of liquidation. This may either be by a resolution of the company’s partners or general assembly duly notarized, or by court order.
  • Certified copy of the signature of company’s director(s), and the company’s legal liquidator, as the case may be, authenticated by the Notary Public.
  • Original Certificate of Registration in the Commercial Register + the original trade license.
  • Copy of the license of the liquidator + Certificate of condition auditor + Letter from the liquidator approving the liquidation of the company.

Second: Cancellation of license(s) & cancellation from the Commercial Registration:

  • Certificates issued in the other Emirates indicating cancellation of license(s) (if any).
  • Original copy of the final account of liquidation approved by the partners or general assembly and stamped by the legal liquidator.
  • No-objection letter concerning cancellation issued by the Ministry Of Human Resources & Emiratisation.
  • Visa Cancellation of the partner(s) in case they are sponsored by their license .
  • Copy of the notice of the company’s dissolution & appointment of a liquidator to be published in the official newspapers.
  • Letter from the partner for the agreement of the liquidation of the company.
  • Ministry of Economy resolution (concerning private shareholding).
  • UAE Securities and Commodities Authority resolution (concerning public shareholding

By Suneesh | October 8 , 2019 | 01

MoHRE launches many awareness campaigns to educate labourers about their rights. One of these campaigns was initiated under the slogan ‘Know your rights’. The campaign communicated the following messages to workers:

  • You are entitled to keep possession of all your personal identification documents once your residency permit is issued
  • If you are asked to sign a contract with terms and conditions which are different from MoHRE’s standard contracts, report immediately to the nearest labour office even if you are advised that the changes are of advantage to you, as contract substitution is illegal
  • If your employer fails to present you with a contract or provide you with work, MoHRE will assist you in finding alternative employment
  • If your employer fails to present you with a work contract within one week of your arrival, report to the nearest labour office
  • To avoid violating the law, do not accept other employment without first reporting to the Labour Office at MoHRE
  • UAE law requires your employer to pay the costs of the issuance of an entry visa and travel to the UAE, and the costs of post arrival processing requirements such as medical tests in the UAE and the issuance of your Residency Permit
  • Your contract must match your job offer and you should keep a copy of your signed contract
  • You have the right to leave your job at any time, but be aware of your contractual obligations
  • The termination of your contract can be ended by the employer or the employee and it can be by mutual consent
  • It is important for employees to follow the required legal steps for terminating a contract as the Labour Office can help recover any dues that are owed to the employee and arrange placement in alternative employment if eligible to obtain a new work permit

By Suneesh | June 6 , 2019 | 01

The General Pension and Social Security Authority announced that the Private, as well as Government Sector companies, must register their employees who are Emirati. Subject to the provisions of the Federal Law No. 07 of 1999 on Pension and Social Security for registering the employees with the GPSSA, it is mandatory for registering for all the UAE nationals, except for military retirees employed in Public and private sectors. The employee has to verify and make sure that the registration procedures have been done with the Authority. In the case of non-registration, the employee has to contact GPSSA to make sure that the rights of him and his families are protected adequately. It was also declared that the authority should reach out to the HR departments throughout the government and private companies.

It is mandatory for the UAE national who are aged between 18 to 60 to get registered with the General Pension and Social Security Authority. They have to provide the GPSSA with a medical report that is duly issued by the certified medical centers. These reports act as evidence of them to be physically fit for employment.

The authority has always stressed that obtaining the social security coverage for all of the UAE nationals who work across the United Arab Emirates, is mandatory by the prescribed law.

By Suneesh | April 11 , 2019 | 01

OFFICE TIMINGS


Saturday to Thursday from 8: 00 a.m. to 8: 00 p.m