Abu Dhabi doctor on fixed-term contract must compensate employer for resigning while under probation

I am a medical doctor and have signed a limited period contract with a hospital. During the probationary period, I resigned from the position with one month notice period which I completed. Now I have been asked to pay 45 days' full salary (not just basic) and unless that is paid the hospital has informed me that I won't get the NOC which I require to start my next employment. Can you please advise me if the amount is payable and if so should it be calculated on basic salary plus allowances? VP, Abu Dhabi

While fixed-term contracts provide a certain amount of protection for employees, there are downsides upon resigning before the contract ends. If an employee breaks a contract the employer can invoke Article 116 of Labour Law which states: “the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract provided that the amount of compensation does not exceed the wage of half a month for the period of three months, or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract”. This is equivalent to 45 days’ pay. VP is obligated to make the payment to the hospital so should do so to avoid problems in moving to another job. That said, the calculation should be based on the basic salary only, not including allowances, in the same way as the end of service gratuities are calculated.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 20 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.

pf@thenational.ae