I have resigned from a company where I was employed on a limited contract. I only worked for one year and five months, and my contract was for two years. I know I will have to pay a penalty of 45 days. I've read in your column that the 45-day salary payment would be based on my basic salary, but the company also wants to include my allowances. KH, Dubai
It disappoints me that companies want to have things all their own way. End-of-service benefits are calculated using a basic salary so companies will often try to keep that low. This basic salary must then also be used when calculating penalties payable, such as for breaking a fixed-term contract. The latest version of the UAE Labour Law, as available from the Ministry of Human Resources and Emiratisation, formerly the Ministry of Labour, states in Article 116: “… 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 the clarified wording as amended by Federal Law No 12 dated October 12, 1986. The previous wording referred to “pay” but the revised wording makes it clear that the actual salary, the wages payable, is to be used for the purpose of the calculation of the penalty, not the full package of benefits. I presume that KH’s employer is using the old wording.
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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The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
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The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
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“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
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