UAE employee should not sign paperwork until all benefits have been paid

Is there a case to be filed against this employer? The employee had a two-year fixed contract that was completed and a new unlimited contract was given. In the new contract, the employer is required to give one month’s notice of termination and the employee three months’ notice. After five years’ service, three months’ written notice was given but the employer only paid wages for two months. At the leaving date the employer asked the employee to sign some documents stating that all end-of-service benefits had been paid. The employee refused and stated the complaint would be registered with the Ministry of Labour, as the last salary payment was not given nor the gratuity. Does this qualify as arbitrary dismissal? AA, Abu Dhabi

Although this is not a case of arbitrary dismissal, which is also known as wrongful termination, there is certainly a case against the employer, as they have acted incorrectly. If an employee is required to give three months’ notice then they can either work for that period of time and be paid for it, or they can be paid in lieu. As there has been five years’ service, the full amount of end of service gratuity should be payable in full, being 21 days’ pay for each year of service for up to five years and 30 days for each year, or pro rata, into the sixth year based on the final regular wage. There is only a reduction if someone resigns with fewer than five years of service. Employees should not sign paperwork to say all benefits have been paid when this is not the case, and if the employer refuses to pay what is due, a formal case should be raised with the ministry.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with more than 20 years of 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. Readers are encouraged to seek appropriate independent legal advice.

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