Keren Bobker
I terminated my contract with my current employer, giving them notice back in January 2016 that I will work until the end of the school year. I have broken my two-year contract as I will have only completed one year. What fees is my employer able to deduct from my final wage? I understand that employers are not allowed to deduct recruitment costs and visa costs, but I can't find examples of what they are allowed to deduct. As I will have completed one year, I believe that the labour law states I am entitled to 21 days' gratuity of my basic pay. Is that correct? JD, Abu Dhabi
There are a number of issues here. No employer is permitted to pass the cost of taking them on, and that includes the costs of recruitment and any visa or labour card fees. This is per ministerial order 52 of 1989, Article 6. There will, however, be a cost in leaving as any employee who breaks the terms of a fixed or limited contract is liable to pay a specified amount per Article 116 of UAE Labour Law which states: “If the contract has been terminated on part of the employee … the employee becomes liable for compensating the employer against losses incurred by him in consequence of contract termination, provided that the amount of compensation may not exceed half a month’s pay for a period of three months or for the remaining period of contract, whichever is shorter, unless the terms of the contract provide otherwise.” This should be based on a basic salary rather than including any allowances. Furthermore, no end of service gratuity is due in this particular situation as any employee who breaks a fixed contract after such a short period forfeits this benefit. Article 138 of Labour Law states: “If an employee under a contract with limited period leaves his work at his own option before the end of the contract period, he shall not be entitled to end of service gratuity unless the period of his continuous service exceeds five years.”
Keren Bobker is an independent financial adviser 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.
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