Non-payment of salaries on time is a violation of law

My company has not paid us our March and April salaries for this year. What are our legal options?

My company has not paid us our March and April salaries for this year. The company has thousands of staff and to cover the WPS (Wages Protection System) requirements they cover 80 per cent of the employees’ basic salaries, mainly the lower salaried employees. They only pay the basic salaries this way, no allowances or overtime. What legal action should we take in such a scenario, as we have no information when the pending salaries will be released? SZ, Abu Dhabi

The Wages Protection System was introduced in 2009 as a way of ensuring that payments to employees were made properly and in a timely manner. This was followed by a further decree from the Ministry of Human Resources and Emiratisation (MOHRE) in October 2016, Ministerial Decree No 739 of 2016, which has made the rules stricter to the benefit of employees. The decree stated that the payment of salary is considered late if it has not been paid within 10 days of the due date registered in the WPS and also that an employer will be deemed as refusing to pay wages if it is not paid within one calendar month of the date payment is due.

Once the MOHRE is aware of a breach of the rules, there are a number of options. For an employer of this size with payments more than 16 days after the due date, the Ministry will warn them that no additional work permits will be granted and their licence to trade will be suspended. Once a company has not paid for more than a month, other action can be taken such as a suspension of licence and issuance of visas for any related companies. If wages are unpaid for a period of 60 days, MOHRE can impose a penalty of Dh5,000 per worker, up to a maximum of Dh50,000 in total.

If payments are already two months late MOHRE should already be aware of the issues; these should be picked up automatically if payments do not show on the WPS. SZ should contact the MOHRE helpline on 800 665 or visit his local labour office for advice and support. The employer is in breach of UAE Labour Law, specifically Article 121, which states: “The worker may leave work without notice in the following cases … Should the employer breach his obligations towards the worker, as set forth in the contract or the law”. This means that an employee can leave without giving notice (although I strongly recommend clearing this with MOHRE first) and will not receive an employment ban.

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.

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Published: May 12, 2017 04:00 AM

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