'Will my dormant account still exist after five years?'

The New Zealand resident left money in a UAE account when exiting the country

Previously the central bank issued rules regarding dormant accounts in an April 2018 circular. Getty Images

I left the UAE five years ago and left some money in a bank account. I didn't leave any debts but I have never returned to the country as I expected I would. I have a few questions. The account was with a bank that no longer exists, so is my money now with another bank? I have been told that as I haven't been in contact or done anything on the account that it will be frozen. How do I access it now? Is there a time limit on accounts that are left behind or will I lose my money? HB, New Zealand

HB's account was with a lender that was involved in a bank merger. However, all accounts from the original bank still exist. For several years, accounts are marked as dormant if there is no activity for six months, although some financial institutions wait for a year now. Such accounts can be reactivated if the account holder makes contact with the bank. Banks will usually ask for someone to visit in person with proof of identity, however, they should be able to accept certified documentation from abroad although processes will differ from bank to bank.

According to a Central Bank of the UAE circular, issued in February 2011, Article 9b says: "None of the opened accounts can be considered 'dormant' if the customer's address is known or if the customer is present and has other active accounts with the bank. Accounts are classified as dormant only in accordance with the provisions of these regulations issued by the Central Bank in this regard."

The rules regarding dormant accounts were updated in a 2018 Central Bank circular. This states that most personal accounts are officially dormant if there have been no transactions for a period of six years. If an account remains dormant and balances unclaimed for a period of seven years from the date of the last transaction, and the balance exceeds Dh3,000, the balance can be transferred to the Unclaimed Balances Account at the Central Bank. There are specific procedures that banks follow to do this.

Banks are expected to keep customer records up to date and are not permitted to charge fees on dormant accounts with balances of less than Dh3,000.

If someone leaves the UAE but retains an account, it is best to ensure there is the odd transaction to ensure it is not marked as dormant.

My colleagues and I were sent a memo from the management about a salary reduction due to "Excise Tax Implementation". We are sure the business was doing well as the share price is high and they have just bought a new factory. Staff have been told that if we don't sign a form to agree to a salary reduction, they will terminate us for this reason. Can the employer reduce our salaries due to this tax and do we have any options or protection if we don't agree? SN, Dubai

The UAE Government has recently increased excise taxes on a number of retail products, mainly on tobacco and on drinks with a high sugar content. This was announced a while ago, although it was implemented in December 2019. However, this in itself is not a legal reason for any employer, including any in these lines of business, to reduce the employee salaries, even if it might reduce the business turnover or profits.

No employer is permitted to change the terms of a contract of employment without the employee’s permission and if the employee refuses and is made redundant they would have good reason to claim arbitrary dismissal. Article 122 of UAE Labour Law states: “The termination of the employment of the worker by the employer shall be deemed arbitrary should the cause of termination not be related to the work … ”

In this situation, the employer can register a case against the employer, using the form they were asked to sign to support their cases. I would expect such cases to be upheld by the courts. A compensation payment should be due in accordance with Article 123 of the law: “Should the worker be arbitrarily dismissed, the competent court may order the employer to pay a compensation to the worker. The court shall assess such compensation, taking into account the type of work and the extent of damage incurred to the worker as well as the duration of employment and after the investigation of the work conditions. In all cases, the amount of compensation shall not exceed the wage of the worker for a period of three months calculated on the basis of the last due wage.”

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 25 years’ experience. Contact her at [e-mail]. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only