Monday, June 27, 2011

End of service benefit should be calculated basis of total salary -Dubai Court

A worker’s end of service benefit should be calculated with respect to his total salary and not just the basic payment, according to a new ruling by the Dubai Court of Cassation.The decision comes in a case where an employee sought dues of up to Dh159,000 from his employer, which was rejected by the Court of First Instance and later overturned another court.
However, there was no indication from the court whether this was a precedent or only a ruling for this particular case.
Accusing the company of his arbitrary suspension, the employee in his lawsuit demands three months’ salary as compensation for sacking him without notice, Dh11,000 as salary of the last month he worked, Dh22,000 as leave allowance and ticket to his home country and Dh82,000 as his end of service gratuity.
The plaintiff also claimed in the lawsuit that he worked in the company as a Director of Advertising and Editor of a magazine owned by the company.
However, Court of First Instance in its judgment rejected his lawsuit and ordered the employer to pay a total amount of Dh54,000 to the employee.
The employee appealed against the verdict to the Court of Appeal which ordered the employer to pay the value of a return ticket to the complainant’s home country in addition to the amount ordered by the earlier court.
The prosecution also appealed against the ruling on the basis that the end of service benefit of the employee was calculated only on according to the basic salary of worker, which it said was against the labour law.
The Court of Cassation accepted the appeal and directed the case to the Court of Appeal asking for a new panel judges to look into the case.
The Court of Cassation observed: "The pay in accordance with the provisions of Article I of the Labor Law includes all that a worker receives as emolument, whether in cash or in kind, hence the gratuity should be calculated according to the entire amount received by a worker, including his monthly commission.”