Question ---- I worked at a company for more than three years on a contract for limited period. One month ago, I submitted my resignation after I received another job opportunity. But the employer did not allow me to join the new firm. He refused to give me my end-of-service gratuity. He then deducted 45 days’ salary for breaking the limited contract. He said the Labour Law does not entitle me to any end-of-service amount and that he may prevent me from transferring to another sponsor. Please clarify my right as per the law, and whether I am not entitled to any compensation, and whether I may not transfer to a new company. Note that I have been with the current employer for more than three years, and that in accordance with the Labour Law I am not required to obtain a no-objection certificate for transfer of sponsorship. Please advise. Many thanks.
Answer
I would like to clarify to the questioner that the Labour Law does not entitle a worker who was working under contract for limited period to claim end-of-service if the worker himself broke the contract. But the worker shall compensate the employer an amount equivalent to 45 days’ salary if the employer can prove the damages. The worker is, as per the Labour Law, entitled only to due pay, which the worker did not obtain. As for a transfer to a new sponsor, the employer might request the Ministry of Labour to impose a one-year ban on the questioner on grounds that the questioner broke the employment contract, which is for a limited period, and which caused damages to the employer. Therefore, I advise the questioner to seek to resolve this matter amicably with the employer so that he can transfer to a new sponsor.
Questions answered by Advocate Mohammad Ebrahim Al Shaiba of Al Bahar Advocates and Legal Consultants
Please note we are adding few frequently asked questions to avoid the confusion of the parties
Termination of Employment Contract in UAE – Frequently asked Questions
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 labor 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 a compensation to the employer for revocation of the contract? … article (116):
Where the contract is broken by the worker before the limited time. 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 month 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 labor 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.
