59A7D41EB44EABC4F2C2B68D88211BF4 U.A.E Visa Rules and Procedures-Law updates -free legal advice: August 2011

Sunday, August 28, 2011

No fines on private sector during Eid

Private sector firms which default on extending labour cards and other papers will be exempted from penalties during Eid al Fitr but they should finish all papers just after the end of the holiday, the Ministry of Labour has said.
The exemption covers all private sector transactions at the labour ministry, mainly labour cards which require employers to pay fines in case they do not renew them 60 days after they expire. Under the labour law, employers must pay Dh1,000 for each delay month.
“The ministry will not impose fines against companies which default in their transactions during Eid holiday,” the semi official Arabic language daily 'Al Ittihad' said, quoting an unnamed ministry official.
“All companies are required to immediately come to the ministry and finish those transactions just after the end of the holiday.”
Government departments will remain closed from Sunday (Aug 28) until Saturday (Sept 3). They reopen on Sunday (Sept 4).

Saturday, August 20, 2011

‘Fine’ plan for not registering for ID cards

The Emirates Identity Authority (Emirates ID) has announced that it is working on a plan which authorises it to impose fines on residents who fail to register for the national ID card.

According to a Gulf News report, a statement issued by the authority said it is working out a plan for the Prime Ministerial Decision No. 25 for 2011, published in the UAE Government Gazette recently.

"The Authority will put together a robust mechanism to fully implement the Prime Ministerial Decision, which will be effective within 60 days from its date of issue," Gulf News quoted the statement without elaborating on further details.

When contacted, a spokesman of the Emiartes ID said it will announce the implementation plan soon, which will specify what category of residents will be fined for not registering for ID cards.

The government had previously fixed December 31, 2010 as the deadline for both Emiratis and expatriates to register for ID cards. However, the deadline has since been extended.

Wednesday, August 17, 2011

Doing a Business in UAE

Legal Structures for Business in UAE
Earlier, each emirate followed its own procedures governing the operations of foreign business interests. In practice, however, Dubai and the other emirates followed the same general system, whereby foreign companies operated in one of three ways: with a local sponsor, through a partnership with a UAE national or company, or through a private limited company or public shareholding company incorporated by Ruler's decree. 

Since 1984, steps have been taken to introduce a codified company’s law applicable throughout the UAE. Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 - the "Commercial Companies Law" - and its by-laws have been issued. In broad terms the provisions of the Law are as follows:
The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organisation which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. It further lays down provisions governing conversion, merger and dissolution of companies.

Ownership Requirements


51 % participation by UAE nationals is the general requirement for all UAE established companies except:

1.       Where the law requires 100% local ownership

2.       In the Jebel Ali Free Zone

3.       In activities open to 100% AGCC ownership.

4.       Where wholly owned AGCC companies enter into partnership with UAE nationals.

5.       In respect of foreign companies registering branches or a representative office in Dubai.

6.       In professional or artisan companies where 100% foreign ownership is permitted.

The basic requirement for all business activity in Dubai is one of the following three categories of licences: 


·         Commercial licences covering all kinds of trading activity.

·         Professional licences covering professions, services, craftsmen and artisans.

·         Industrial licences for establishing industrial or manufacturing activity.  

These licences are all issued by the Dubai Economic Department. However, licences for some categories of business require approval from certain ministries and other authorities: for example, banks and financial institutions from the Central Bank of the UAE; insurance companies and related agencies from the Ministry of Economy and Commerce; manufacturing from the Ministry of Finance and Industry; and pharmaceutical and medical products from the Ministry of Health.

More detailed procedures apply to businesses engaged in oil or gas production and related industries.

Practising some trade activities (e.g. jewellery and insurance) requires the submission of a financial guarantee issued by a bank operating in Dubai. In general, all commercial and industrial businesses in Dubai should be registered with the Dubai Chamber of Commerce and Industry.
Company Formation UAE may take one of seven forms: 

1) Public Shareholding Companies

2) Private Shareholding Companies

3) Limited Liability Companies

4) General Partnerships

5) Limited Partnerships

6) Partnerships Limited by Shares

7) Shareholding Companies

Each entity must be registered and licensed with the UAE Federal Ministry of Economy and Commerce and with the appropriate authority in the Emirate in which its office will be located.

Public share holding company 


Public shareholding company formation uae is a company with a capital divided into equal negotiable shares. In such companies a shareholder’s liability is limited by the number of shares held by him.
Minimum capital required to form a public share holding company in uae is AED 10 million with a nominal face value of AED 1-100. Shares are registered in a share register and cannot be issued lower than the nominal value. All shares must have equal rights.

The Board of Directors must have a minimum of three and not more than twelve directors. The chairman, as well as a majority of the board, must be UAE nationals for public share holding company formation uae.

Private Shareholding Company


Another company formation uae is private share holding company. A private shareholding company must have a minimum of three shareholders. The minimum share capital to form a private share holding company is AED 2 million.

Shares may not be offered to the public. The Chairman and majority of the Directors in a private shareholding company must be uae nationals.

Limited Liability Company


This type of company formation uae is widely accepted way to business. Under the Commercial Companies Law or CCL (Federal Law No. 8 of 1984 Concerning Commercial Companies as amended by Federal Law No 1 of 1984 and Federal Law No 13 of 1988, Federal Law No. 15 of 1998), foreign investors are permitted to hold up to 49 per cent equity ownership in UAE companies, 51 per cent of the equity must be held at all times by one or more UAE nationals

This type of company formation uae can be formed by a minimum of two and a maximum of fifty persons. Shareholder liability is limited to the value of shares held in the company’s capital.Non UAE nationals may own up to 49 percent of an LLC. The Companies Law provides that an LLC may engage in any lawful activity except insurance, banking and investment of money for others. 

The following steps are required in establishing a limited liability company in Dubai. 


·         Select a commercial name for the company and have it approved by the Licensing Department of the Economic Department;

·         Draw up the company's Memorandum of Association and have it notarised by a Notary Public in the Dubai Courts;

·         Seek approval from the Economic Department and apply for entry in the Commercial Register;

·         Once approval is granted, the company will be entered in the Commercial Register and have its Memorandum of Association published in the Ministry of Economy and Commerce's Bulletin. The licence will then be issued by the Economic Department;

·         The company should then be registered with the Dubai Chamber of Commerce and Industry

General Partners

General Partnership company formation uae is a type of company where all the shareholders are jointly liable for the company liabilities to the extent of their assets. All the partners should be UAE nationals.  General partnerships are formed by two or more UAE nationals who are jointly and severally liable for its debts. Interests of a partner can be transferred as stipulated in the partnership agreement or with the approval of all partners. 
Limited Partnership
 A limited partnership is another type of company formation uae which composed of one or more general partners who are jointly and severally liable for all of its debts, and one or more limited partners who are liable for the limited partnerships debts only to the extent of his capital contribution.

A partnership limited by shares has both general partners with unlimited liability and partners whose liability is limited by their shares in the capital. The capital must be at least DH 500,000 and has to be divided into negotiable shares of equal value.
Joint Ventures
Another company formation uae is Joint Participation is a form of company consists of two or more partners for carrying out a single or multiple businesses by one of the partners in his own personal name.

This is a contractual agreement between a foreign party and a local party licensed to engage in the desired activity. The local equity participation in the joint venture must be at least 51%, but the profit and loss distribution can be prescribed.
There is no need to license the joint venture or publish the agreement. The foreign partner deals with third parties under the name of the local partner who – unless the agreement is publicized – bears all liability.

A joint venture is a type of company formation uae where contract may be written or oral and not required to be notarized. Third parties can recourse only to the partners with whom they deal. 

Thursday, August 11, 2011

Termination of Employment Contract in UAE

1. When the contract is terminated?
It is terminated in the following cases:
- If both parties agree on its termination, provided that the worker's consent is given in writing.
- If the limited contract expires, unless tacitly or expressly extended.
- If the employer resigned the worker or the worker submitted his resignation in the unlimited contracts, provided that each of them shall notify the other according to the law. 
2. Is the contract terminated by worker's or employer's death?
Article  (114). Employment contract shall not be terminated by employer's death, unless the subject of the contract is connected with his own person. But the contract is terminated by worker's death or his total disability, on a condition of providing an approved medical certificate for the same.
3. If the worker's disability is partial, is the employment contract terminated?
If the disability is partial, he can perform other works according to his health condition … an employer shall, according to a request from the worker, shall shift the worker to another position suitable to the worker, And to pay him the salary given at such position.
* Example: a worker is injured.. His injury is partial as per a medical report.. The worker then requested from the employer to shift him from his current position (builder) to another one suitable with his health condition (guard) .. There, the employer shall pay the worker a monthly salary of (guard) , not a salary of his last position ( builder).
* Cancellation Of The Limited Contract By Employer And Worker First: cancellation of the limited contract by employer:
4. My contract is a limited contract and the employer dismissed me without a legal reason, am I entitled to compensation for the injustice dismissal?
Article (115) : If the employer dismissed you and revoked the contract without the reasons provided in the article ( 120) , he shall compensate the worker by a pay of (3) months or the period remained from the contract , whichever is shorter … unless otherwise provided by the contract.
* Example: a worker with limited contract started from 10/1/ 2005 and expires on 9/1/ 2008 … and the employer dismissed him without a reason or justification in 3/2/2007 .. Here, the worker is entitled for a compensation against the injustice dismissal , payment for ( 3) months.
* Example: a worker with a limited contract started from 10/ 1/ 2004 and expires on 9/ 1/2007 .. the employer dismissed him without a reason or justification in 3/12/ 2006 ..  here, the employer shall compensate the worker for the injustice dismissal for the remaining period of the contract. Namely, he was dismissed in 3/12/2006 before his contract expires in 9/1/ 2007 .. so the remaining period as from date of dismissal to the date of expiry of the contract is = (37) days … and it is the period for which the worker is entitled for compensation by the employer .. (This is the explanation for phrase of “the remaining period from the contract).
5. Is the compensation for injustice dismissal calculated on the basic salary or the total salary?
Compensation is calculated on the total salary received by the worker According to the article (115) in which it is mentioned the word (remuneration) … and the remuneration is provided for by the labour law, … article (1). (Remuneration): “All payments made to the worker on a yearly, monthly, weekly, daily, hourly, piece work, or production or commission basis. Remuneration shall include raise of living and include as well any grant given to the worker as a reward for his honesty or efficiency if such amounts are provided for in the contract of employment or in the internal regulations of the establishment or have been granted by custom or common practice to such extent that the workers of the establishment regard them as part of their remuneration and not as donations " Second: Revocation Of The Limited Contract Of Association
6. My contract is a limited contract and I submitted my resignation before my contract expires; shall I pay compensation to the employer for revocation of the contract? …
 Article (116):  Where the contract is broken by the worker before the limited time the Worker should by 45 day from his total salary or the residual period of the contract whichever is shorter
7. I worked with the employer for two years and my contract is limited by (3) years and I obtained a work opportunity at another place …. Is the employer entitled to deduct (45) from my dues for non- completion of the contract of employment?
According to what has been mentioned into these questions: In all cases and according to the article (116): If the contract of the worker is with a limited period and he submitted his resignation before expiry of the contract without the reasons provided for in article (121)., the worker shall compensate the employer for What he has sustained from damage sue to revocation of the contract through compensating the employer by half of remuneration of the last three months or the remaining period from the contract , or whichever closer , unless otherwise provided for by the contract.
* Example: a worker with a limited period contract for (3) years .. he worker two years and ( 11) months … and he submitted his resignation , here, he shall compensate the employer by a half of remuneration of the last three months or the remaining period from the contract , or whichever closer from them , unless otherwise provided for in the contract.
8. My contract is a limited and it has not been expired yet, may I submit my resignation and serve for one moth of notice?
As for the limited contracts, there is no one month of notice … because the one month notice is for the unlimited contract .. therefore , the worker shall compensate the employer by a half of remuneration of the last three months or the remaining period from the contract , or whichever closer from them , unless otherwise provided for in the contract.
* Example : a limited contract started from 4/3/2005 and expires on 3/ 3/ 2008 , and the worker submitted his resignation in 5/6/ 2006 .. here, the worker shall compensate the employer by a half of remuneration of the last three months or the remaining period from the contract , or whichever closer from them , unless otherwise provided for in the contract.
9. I submitted my resignation before ( 6) months from expiry of my limited contract and the employer wants to deduct a remuneration of 45) days , is he entitled for so ?
As per the article (116) from the labour law … the employer is entitled to deduct from the total remuneration.. due to your revocation of your contract of employment with no reason
10. A worker with limited contract which will be expired after one year submitted his resignation due to his personal circumstances: ( family problems at his home country) or ( he obtained another job) shall he pay the compensation amount ?
Yes, the employer is entitled to demand the worker for the compensation amount, because these are personal matters
11. How the compensation is calculated, on the basic or total salary?
It is calculated on the last remuneration received by the worker.
* Termination Of The Unlimited Contract Of Employment By Employer And Worker: First: termination of the employment contract by worker: article (117).
12. I am employed under a labour contract of unlimited period, and I want to leave my present job. What should I do?
- This labor should submit his written resignation letter…And should mention in it that he want to work for a period of one month only, and this one month period shall represent the notice period fixed in one month.
13. I have terminated the service of one labor employed with me under a labor contract of unlimited period; do I need to give him a notice of one month?
- Yes… because, based on Article No. 117, if the employer is desirous to terminate the service of any of his employees, he should do so in writing and should give him a notice of one month as per the law…except in case of termination pursuant to Article No.120
14. I am employed under a labor contract of unlimited period…and I receive my salary on per diem basis…, how can I send a notice to my employer in case I have submitted my resignation?
Article No. 117
- The notice can be send by per diem labors as follow:
1- If the labor has worked for a period exceeding 6 months and less than one year, he should sent a notice of (one week) to his employer.2- If the labor has worked for a period not less than one year, he should send a notice of (two weeks) to his employer.
3- If the labor has worked for a period not less than five year, he should send a notice of
(one month) to his employer.
* Example (1): A labour with a labour contract of unlimited period, who worked with his employer for a period of 7 months for a salary of DHS. 25/day…If such worker needs to resign, he should give a notice of one week to his employer commencing from the date of his resignation letter * Example (2): A labour with a labour contract of unlimited period, who worked with his employer for a period of one year for a salary of DHS. 30/day…If such worker needs to resign, he should give a notice of two weeks to his employer commencing from the date of his resignation letter
*Example (3): A labor with a labor contract of unlimited period, who worked with his employer for a period of five years for a salary of DHS. 50/day…If such worker needs to resign, he should give a notice of one month to his employer commencing from the date of his resignation letter
*Example (4): A labor with a labor contract of unlimited period, who worked with his employer for a period of three years for a salary of DHS. 20/day…If such worker needs to resign, he should give a notice of two weeks to his employer commencing from the date of his resignation letter
15. If the employer or the worker refused to receive the termination or resignation letters, how can we proof the same?
- Both parties should resort to the Labor Relation Department…As for the worker, he should continue in performing his duties in case he has submitted a compliant.
16. I have submitted my resignation letter to my employer, knowing that I am working under unlimited labor contract, do the said one month notice to be calculated within the total service period?
Article No. 118 - Yes, such period shall be calculated within the total service period provided that the worker has actually worked within the said period
17. I have worked during the notice period of one month after I have submitted my resignation letter… And after the notice period has expired, my employer asked for an extension of the notice period without any reason. Shall he have the right to do the same?
The employer may extent the notice period after the worker has completed his work in that period, but the same should be under the consent of both parties.
18. I have submitted my resignation letter to my employer, knowing that I am working under unlimited labor contract besides, we have already, me and my employer agreed to reduce the notice period, what shall be my legal position in such a case?
The one-month notice period may neither be reduced nor may the month period be relieved from even if the same has happened under the consent of both parties… but the respite period may be increased, (the month notice)
19. How can the month notice allowance be calculated if the worker has submitted his resignation letter or if the employer has terminated the service of the worker…and the worker has already done his duties during the said period?
- It shall be calculated based on the last salary received by the worker.
* Example: A labor with a labor contract of unlimited period, and who worked with his employer for a salary of DHS.2000… but at present time, he receives DHS. 3000 as the employer has increased his salary
- In this case, the worker shall have the right to receive the one month notice salary based on the last salary he received from his employer which amounts to DHS. 3000
20. I have worked with my employer for a period of one year under a labor contract of Unlimited period, yet I have submitted my resignation letter… and I have worked during the notice period of one month, but it was stipulated in my labor contract that if I submitted my resignation, I should work for 3 month as a notice period…Do I need to be bound to such condition?
- Yes, the labor should be bound to the one month notice period, (3 months), if his contract so requires.
21. In case the worker has submitted his resignation letter, but he suddenly ceased working before completing the one month prescribed notice period, what shall be the legal action in this case?
Article No. 119 If the worker didn’t work during the notice period or if he didn’t complete the prescribed period…he should, in this compensate the employer with an allowance called: (the notice allowance) and this shall be through the last salary received by him from his employer.
22. in case the employer has terminated the worker’s unlimited labor contract and didn’t ask the said worker to work during the notice period…, or if he has reduced the notice period, then What shall be the legal action towards such case?
- If the employer has terminated the service of his employee, he should, in case he is not desirous to avail the work of his employee during the notice period, pay to the worker the one month notice period’s salary based on the last salary received by the worker. And in case the employer has terminated the service of his employee after the later has worked for a limited period from such notice period, then the employer should compensate his said employee for the remaining period.
* Example: The employer has terminated the service of his employee, whereas such employee has worked for 20 days from the one month notice period, but the employer has asked him to cease working…In this case, the employer has to compensate the worker also for the remaining period which amounts to 10 days.
23. A worker was terminated by the employer after the former has worked for 11.5 months…whereas the employer has paid him the value of the one month notice period, do such worker deserves the end of service gratuity?
- The worker shall not have the right to obtain the end of service gratuity as he didn’t work during the one month notice period.
24. If the worker has submitted his resignation letter and was ready to work during the one month notice period…and the employer has waived such period, do such worker deserves the allowance of the one month notice period?
- Yes, he shall have the right to claim for the allowance of the one month notice period.
25. In case the worker has submitted his resignation letter and took a leave… or resigned during such leave period…shall the said one month notice period become invalid?
- No, it shall not become be invalid and the worker should work for the one month notice period.
26. May the employer terminate the worker without notice?
Article: (120) - Yes it is possible in some cases including:
1- If the worker has impersonated a false personality or nationality or if he has presented forged documents or certificates.
2- If the worker is still in the probation period and was dismissed within or at the end of such period.
3- If the worker has committed a mistake out of which a great loss has resulted to the employer…provided that such employer has already reported this case to the Ministry of Labor within a period of 48H from being informed by the incident.
4- If the worker has violated the work safety instructions or the work place, provided that such instructions were in writing and displayed in a prominent place.
5- If the worker hasn’t performed his main obligations as per the labor contract…and continue in so doing in spite of a written investigation made with him for this purpose and of noticing him not to repeat this violation, otherwise he shall be liable for termination.
6- If the worker has been finally adjudged by a competent court for a crime damaging honour, general morals or for breach of trust.
7- If he had disclosed the company’s confidential information.
8- If he was found drunk or using drugs during the work hours.
9- If he had assault his employer, the manager in charge or any one of his colleagues during the work hours
10- If the worker is absent without presence of reasonable cause, for: - More than discontinuous 20 days during the year. - More than 7 continuous days.
Note: In all the above cases, the employer should prove the occurrence of the relevant incident.
* Example: I have worked with my employer…and he has accused me for the crime of breach of trust…an investigation in the matter was carried out and as a result I was finally adjudged for a fine and imprisonment… ACCORDINGLY, the employer terminated service…so I am claiming for the amount of the notice period and the compensation such termination.
- The worker shall not have the right to have the amount of the notice period based on Article: 120 of the labor law as such worker was dismissed as a result of breach of trust…so the employer shall have the right to terminate him without notice.
* Example: I have been absent from duty for more than 7 continuous days…when I am back to work, my employer dismissed me without any reason… I am claiming for the amount of the notice period.
- The worker shall not have the right to have the amount of the notice period if he was absent without reason for 7 continuous days… but if he has any reason, such as an approved sick leave, his employer shall not have the right to dismiss him.
27. If the employer is having a right to dismiss the worker without notice…, shall such worker have the right to leave the work without a notice?
Article: 121: - The worker may have such right in the following two cases:
* If the employer has violated his obligations before the worker with respect to the terms provided for in the contract and the law.
* If an assault had happened against the worker from the employer or from his representative.
Note: The worker should prove the occurrence of both cases.
* Example: I am working with my employer… but he didn’t pay me the salary of 3 months…so I have left the work…but my employer is claiming for the notice period?
- The employer shall not have the right to claim for the notice period as he has violated the law and the labor contract based on Article: 121
28. My employer has dismissed me without any reason after I have passed the probation period… do such dismissal considered arbitrary?
Article: 122 - If the employer has dismissed the worker, after the probation period without any reason, or if the reason of such dismissal has no connection with the work or if it is due to a compliant to the concerned authorities against the employer or for a case filed against the employer…then such dismissal shall be considered arbitrary.
29. If the employer has arbitrary dismissed me without presence of any reason and I am damaged due to the same…how can such damage and arbitrary dismissal be determined?
Article: 123The competent court is the party which adjudge the employer to pay the compensation for the worker…and it is the party which estimate the value of such compensation as per the work nature and size of damage incurred by the worker in addition to his period of service…provided that the compensation value shall not exceed the salary of 3 months calculated on the basis of last salary received by the worker.
30. The employer has terminated my service due to the fact that I am not fit from the health point of view, shall he have the right to do the same?
Article: 124:
- He may not have the right to do the same for health reasons before the worker has utilized all his legally due leaves. However any agreement or condition contrary to this Article shall stand null and void.
31- Can I have the right to obtain an experience certificate after I have spent my work period with my employer?
Article: 125:
- The employer should give the worker, on the basis of the later request, and at the end of
his contract period, a free experience certificate…such certificate should include:
A- Date of joining the work
B- His contract expiry Date.
C- Total service period
D- Type of work.
E- Last salary obtained in addition of other entitlements, if any.
* The employer should also give back to the worker all his certificates, tools and equipment, if any.
32. I have worked with my employer, but he have sold the establishment for some other person…how can I obtain my work dues?
Article: 126: - Based on Article: 126, the service shall be continuing even if the establishment was sold to any other person…both new and old employers shall be jointly responsible for a period of 6 months…and after this period the new employer should bear the responsibility alone.
* Example: An establishment was sold by the original employer to some other person, but the original employer didn’t settle the labors dues…then 3 months were elapsed since it was sold to the new employer…in this case both the new and old employers shall be jointly obliged to pay the workers dues…and after 6 months the new employer shall bear such responsibility alone.
33. I have signed the labor contract…whereas mentioned in the said contract a term which stipulates that after the expiry of my service or during suspension of my work, I should not work with any other competing company for a period of two years?
Article: 127: - If it was agreed in the labor contract as such…then the worker should be bound to the same…and should not work with any competing company all through the period mentioned in the contract… provided that:

1- The worker should be of 21 years of age when the said contract was concluded.
2- To fix the time…e.g.: Not to work with any competing company for a period of two years from the date of cancellation.
3- To fix the place…e.g.: Not to work with any competing company in UAE…or any particular Emirate.
4- Type of work… e.g.: In the same company’s field of work… or the same job.
* Important:
The condition of non- competition was not stipulated in the labor contract approved by Ministry of Labor, but it was mentioned in the labor contract concluded abroad or in the internal labor contract concluded between the two parties or in the work offer, do this be valid?
* The work Ban
34. I have worked with my employer under a fixed contract for a period of two years, but I didn’t completed the period of my labor contract…whereas my employer wants to cancel my labor card with a ban of work for one year in a pretext that I didn’t completed the contract period?
- The worker shall be banned from work for one year from the cancellation date if he didn’t complete his fixed period contract…and has ceased working without legal reason…and he shall not have the right to work with other employer during such period.
35. I have worked with an employer with a contract of unlimited period and I didn’t worked for the notice period… shall the employer have the right to put the pan stamp on my passport?
Article: 129:- The employer shall have the right to put the pan stamp if the worker didn’t work for the notice period after resignation…or if he worked for some days from the notice period and ceased working after that altogether without reason…however, the worker shall not have the right to work for another employer during that period.
36. Is there any exclusion with regard to the one year ban on the worker if the original employer agreed to cancel the said ban? Article: 130: - The worker may be excluded from the provisions of the two Articles No. 128 and 129 with regard to the ban before joining the other work and this shall be through the approval of Minister of labor based on the application of the original employer.
37. I am employed under a limited period contract for 3 years and I have asked my employer not to renew the same…then who shall pay the costs of the return ticket?  
Article: 131: - If the worker has completed his limited period contract and if he didn’t want to renew the same…the employer must be obliged to pay his return tickets. And if the worker has joint some other work, then his new employer should be obliged to pay his said return tickets.
38. If I worked under limited or unlimited period contract and submitted my resignation, shall I have the right to ask for return tickets?
- If the worker has resigned or terminated his service contract, he should bear the costs of the return tickets.
39. I have completed my labor contract, whereas there is a stipulation in such labour contract showing that my employer should bear the costs of my family return tickets in addition to the baggage shipping costs, have I the right to bound him to the same?
- If such stipulation is present in the labor contract, the worker shall have the right to claim for the said costs…
40. As for the return tickets, shall my employer have the right to return me to the capital of my home country or to the place he has already brought me from?
- To the place he has already brought you from.41. My employer has cancelled my labour card, and I am now present at the labour camp, but he asked me to leave this accommodation, what is your opinion about this?
- The employer shall have the right to ask the worker to leave the accommodation, if he has paid to the worker all his work dues.
42. If a labour compliant has been referred to the court…from when does the period of 30 days for vacation of the accommodation shall start to go into effect?
Article: 131: - The employer shall file a complaint to vacate the worker from the accommodation…, and the 30 days period shall start to be effective commencing from the date in which the employer has deposited the worker’s dues with the Ministry as a trust…, if the worker didn’t vacate the accommodation after this, the concerned authorities should take the necessary action.
43. How the End of Service Gratuity is determined?
From Article: 132:
- The worker deserves the End of Service Gratuity if he completed one year or more in the service…and it shall be calculated as follow:
A- 21 days for each year from the first 5 service years
B- 30 days for each year if his service years have exceeded the same. However, the total End of Service Gratuity should not exceed the salary of two years.
44. Shall the leaves without pay be calculated within the service period?
Article: 132:- The period of leaving the work without pay shall not be included within the service period.
45. I have worked with my employer for two years and 5 months…, shall the End of Service Gratuity be calculated for the parts of years?
Article: 133: - The worker shall have the right to have the End of Service Gratuity for the part of the year if he has completed one year of service or more.
46. Shall the End of Service Gratuity be calculated for the total salary?
Article: 134: - The End of Service Gratuity shall be calculated according to the last salary, (Basic) obtained by the worker…, this shall be true for all workers getting their salaries on monthly, weekly or daily basis…, and shall be calculated based on the average salary for workers receiving their salaries based on piece. So the allowances shall be included in the basic salary, such as: the accommodation allowance, transportation, overtime and other allowances…………etc.
* Important:
A worker who receives his salary on piece…,e.g. He may receive DHS. 1000 for the piece or DHS. 500 for the piece…, in this case the average salary only should be calculated, i.e. * His total salary for 6 months…, to be divided over 6…to obtain the average salary: Total salary for 6 months = 25000/6 = DHS. 4166 which is the average salary
47. If a worker died, shall his employer pay his End of Service Gratuity?
Article: 136: - If the worker died, his employer must pay his End of Service Gratuity to his hires.
48. I have worked with my employer for the year 1975, i.e. before the issuance of the Labour Law in 1980; shall I have the right to claim for the End of Service Gratuity for my service period with my employer before the issuance of the Federal Labor Law in 1980?
Article: 136:
- The worker shall not be entitled to have the End of Service Gratuity for the period before the issuance of the Federal Labor Law in 1980 unless the worker was a national citizen.
* The Unlimited Period Contract: - In case the worker has ceased working:
49. Kindly show how can the End of Service Gratuity be calculated if the worker has ceased working when he is employed under unlimited Period Contract?
Article: 137:1- If the worker’s service period is not less than one year and not exceeding 3 years, he shall
be entitled to have 1/3 the value of End of Service Gratuity, i.e. 7 days in each year.
2- If his service period has exceeded 3 years but less than 5 years he shall be entitled to have
2/3 the value of End of Service Gratuity, i.e. 14 days in each year.
3- If his service period has exceeded 5 years he shall be entitled to have 21 days as a value of
End of Service Gratuity for each year of service.
* And if the service period has exceeded 5 years he shall have 30 days as End of Service Gratuity for each year of service.
* Example: I have worked with my employer for 2.5 years, how my End of Service Gratuity can be
Calculated, knowing that I have ceased working on my own will, and I have unlimited period contract with a salary of DHS. 1500?
- If the service period does not exceed 3 years, this worker shall have 7 days End of Service Gratuity for each year of service…parts of the year shall also be included, i.e. The two years shall be multiplied by the Gratuity’s days: 7x2 = 14 days
- In case the employer has dismissed a worker of an unlimited period contract without reason after completing one year of service…, such worker shall have the right to receive 21 days End of Service Gratuity for each year:
* Example:
- If the worker has worked for 3 years and 7 months and his employer has then dismissed him, such worker shall be entitled to have:
- 21 days for each year if his service period didn’t exceed 5 years.
- 21x 3 + 21/12x 7= 75 days
* Other Example:
A worker of unlimited Period Contract was dismissed after completing 6.5 years of service ,He shall be entitled to have an End of Service Gratuity of: 21x5+ 30+30/6 = 105+ 30 + 15 = 150 days, whereas 21 days were calculated for the first 5 years…, and 30 days each year for the above to this.
* TheLiimited Period Contract:
- In case the worker has cancelled his labor contract: Article: 138:
If the worker has willingly ceased working before completing the contract period…, he shall
not be entitled to have the End of Service Gratuity…, unless his service period has exceeded
5 years.
* Example:
A worker with a limited period contract which has commenced on 4/4/2004 and expired on
3/4/2007, he has submitted his resignation letter on 25/5/2005 and before completing the
contract period, the worker has cancelled the contract, such worker shall not have the right
to receive the End of Service Gratuity.
* Example:A worker with limited period contract which shall start on 4/4/2001 and expires on 3/4/2004.
This contract was renewed for further 3 years ending on 2/4/2007. This worker has submitted his resignation letter on 20/11/2006…, in this case the said worker shall be completing 5 years and 7 months of service. Then he shall have the right to receive the End of Service Gratuity as provided for in Article: 138. This because his service period has exceeded 5 years
* 5 x 21 + 30/12 x 7 = 105 + 17 = 122 days
* In case the employer has cancelled the labor contract:
In this case the worker shall have the right to receive an End of Service Gratuity if his employer has dismissed him without reason, in amount equal to 21 days for each year provided that he has completed one year of work, and 30 days for each year if his service period has exceeded 5 years.
50. When shall the worker be banned from having the End of Service Gratuity?
 Article: 139:- The worker shall be banned from having the End of Service Gratuity in two cases:
* If the worker was dismissed from the service for any reason set forth in Article: 120 of the labor law…, or if he left the work for the purpose of avoiding dismissal for the same reason
* If the worker has willingly ceased working without notice…, and for reasons other than those shown in Article: 121 of the law, and if he is working under unlimited period contract…, or if he didn’t complete 5 years of service with regard to the limited period contract…, and submitted his resignation letter.
51. I have worked with my employer…, whereas present in the establishment a box called the “saving box” in which the employer was used to put in it an amount of money for the account of the workers as an End of Service Gratuity…, in case I have reached my end of service period, shall I deserve to have from such amount?  
Article: 140:* The worker shall have the right to receive from this amount, if the employer is depositing the same in the saving box against his legal obligation towards the End of Service Gratuity…, and if it was stipulated in the saving box as such.
* The worker shall have the right to receive What he was entitled for from the saving box in addition to the End of Service Gratuity if the saving box didn’t stipulate that What was deposited by the employer in the said saving box is against the employer’s legal obligation towards the End of Service Gratuity.
52. I am working in an establishment, in which the system of pension and insurance is adopted…, in case of my end of service; shall I have the right of option between having the pension and the End of Service Gratuity?
Article: 141:- According to Article: 141:
The worker may choose between having the pension and the End of Service Gratuity or to have his dues in the pension or insurance box or whichever preferred to him…, (except with regard to nationals, whereas the Pensions and Insurance Authority’s terms shall be valid wherefore)…, Law No. 7 for the year 1999 regarding Social Pensions and Insurances.
Return Tickets
* The return tickets shall be in the worker’s account if he resigned without reason before the expiry of the limited period contract or resigned with respect of the unlimited period contract.
* The return tickets shall be in the employer’s account if he dismissed the worker, without reason or cause provided for in Article: 120
* The return tickets shall be in the employer’s account if the worker has completed the limited period contract.

Monday, August 8, 2011

How to overcome the six-month labour ban in UAE

Employees who have been slapped with a six-month labour ban for breaking their contracts before the expiry of two years can work for a new company, provided they hold at least a high school diploma and have been offered a good position and salary by the new company, employers were told by the Ministry of Labour .
To lift the ban, an employee should have been offered a minimum salary of Dh5,000 for high school graduates, Dh7,000 for diploma holders and Dh12,000 for bachelor's degree holders.The salary must be mentioned in the labour contract.
No fee will be imposed for lifting the ban when these conditions are met, Ali Al Shehi, Senior Administrator at the ministry, said in a seminar held to inform employers about their rights and duties as well as recent ministerial decisions.

"We are still imposing the six-month labour ban on employees who quit their jobs before completing two years of service, but the ban can be lifted if the new employer offers the candidate a good position and an appropriate salary," he said.

The new employer needs to submit the employee's educational certificate, which does not need to be attested at this stage. It will be scanned and entered into the Tas'heel system, and a new labour permit will be issued accordingly.
Al Shehi told employers that as of January 2012, company categories will have a different scale when it comes to labour permit applications.
"When a new company is registered, it will be charged Dh1,500 for each of the first four work permits to be issued to the company, which corresponds with category B2," he said.
Afterwards, the company can move up or down categories B1, B2 or B3, or C depending on its activity, the number of employees it hires, their qualifications and diversification in the nationalities of workers.
Companies in B1 category pay Dh600 per work permit, while B2 companies pay Dh1,500 and B3 companies pay Dh2,000 for each permit.
Diversification
"This step aims to encourage diversification and hiring employees from various nationalities, so companies who hire workers from one nationality will not be upgraded, while those that hire from more nationalities will move up to categories B3, B2 and so on," Al Shehi said, adding that companies will also upgrade their categories by hiring skilled workers.

He advised people who want to start new companies to check their sponsor's record at the Department of Economic Development to ensure that their record is clear and they have no other companies facing problems, which will hinder their application.

"The sponsor of a company has to clear any outstanding dues or labour issues before he can sponsor another one, so we advise those who want to open a new business to look for a sponsor who has no other companies registered under his name," Al Shehi said.