On Your Side: Salary allowances not included in gratuity calculations

Keren Bobker on end-of-service gratuity calculations, the rights of employees when leaving a job and buying national bonds from outside the UAE.

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I have been working for a limited liability company on a three-year contract. My contract expired on December 13, 2011. My total salary was Dh2,600. My basic salary was Dh1,230 and there was a performance allowance of Dh300; the rest was for my travel and housing allowance or overtime. On average, I received a Dh500 commission on sales each month. I have worked on all public holidays for the past three years with no extra pay. Under the UAE Labour Law, what end-of-service gratuity payment would I receive? My visa expired on February 7 and I have already told my company not to renew my contract. VSR, Dubai

The end-of-service gratuity is based on basic salary and not allowances. But because a commission has been a regular feature of your salary and is paid monthly, then this must be taken into consideration. This means that the figure on which the gratuity calculation is based on is your basic salary of Dh1,230 plus a commission of Dh500, so a total of Dh1,730 a month, or equivalent to Dh20,760 a year. If an employee has worked for the full three years, then they are entitled to 21 days of pay for each year of service. However, they should be aware that days of absence without pay are not included in the calculation. The figures are calculated pro-rata for partial years. It should also be noted that if someone works on a public holiday, then they are entitled to time off in lieu, or should be paid at a rate of 150 per cent of the standard daily pay.

I was asked in November if I could work for someone for a few weeks because he needed my expertise. After two weeks or so, he offered me a full-time job, which I accepted. At that point, we discussed such things as salary and housing and he took my passport, saying that he would proceed with my employment visa. Things went well up to Christmas, but then my employer started becoming abrupt in the way he would communicate things to me. Over the past couple of weeks, I have been chasing my visa, which still had not been processed. We had a brief meeting, at which my employer was rude, so I started to walk out of the meeting. Words were exchanged and he said to me that he would make it very difficult for me if I did not return and finish the meeting. When asked how, he said: "Because I have your passport." I never returned and drove away. I contacted the human resources department and spoke to the woman dealing with my visa, who said it had been finalised the day before, but I had not been told this. I asked her if it was possible to cancel the visa and return my passport to me. She said no because my employer had to approve that decision. My employer then phoned me and told me not to go to the office again and that it would take two days to cancel the visa. He said my passport would be returned to me only when I had purchased an airline ticket out of the UAE and it would be given to me at the airport. We also spoke about the settlement of leaving his employment and he said he would only pay me up to the day I had left. I told him that I had not quit, but I wanted to give him 30 days' notice, to which he told me that I was in a probationary period and did not have to give notice. He also said I was only entitled to be paid for the actual days worked. He has never offered me a contract of employment and is now telling me I have no rights because I have no contract. As the employer, is it not his responsibility to produce a contract of employment? JS, Dubai

Your employer is not acting correctly. He should not have held on to your passport for any longer than was required to obtain a visa. He also cannot force you to leave the country. I hear of many cases where employers cancel a visa and insist on handing it over at the airport, but they cannot make you get on a plane and leave the country, particularly if you are legally permitted to remain on a tourist visa. Whether you have signed a formal contract or not, standard UAE Labour Law applies. Being paid or receiving benefits is tacit acceptance of a position. If an employee is in a probationary period and if there is no formal contract, it will most likely be assumed to be for three months and the job can be terminated by either side without notice. It is indeed the employer's responsibility to prepare a proper contract, but whether they do or not, the Labour Law still applies.

I have 400 UAE National Bonds and now wish to buy an additional 400 units. However, I am in Pakistan. Can you tell me how I can buy more bonds and how I can check the weekly draw result? SPS, Pakistan

You do not have to be a UAE resident to invest in National Bonds. An online application form can be completed and submitted via its website at www.nationalbonds.ae. Payment can be made via a bank transfer using the payee details on the website. Likewise, all winners are announced on the website.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com or onyourside@thenational.ae