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Thirty days’ notice needed to cancel unlimited contract

Compiled by Ahmed Shaaban (Legal View) / 3 May 2010

Q:  I work as a foreman with a construction company here on an unlimited contract. Unexpectedly, the company terminated my service after only six months. I would like to know if I am entitled to my salary for the rest of the year? What are my other entitlements? I also want to know how the situation will be with a friend of mine who faces the same issue in another company, yet on a three-year limited contract, and terminated for no reason after six months in service.

A: As per Article 120 of the UAE labour law, an employer may dismiss an employee without any notice if the employee was appointed under probation and the termination happened during that period or at its end.

From your letter I understand that you were terminated after six months of service. Since you have completed your six months probation, the following points are to be considered:

As per Article 117, an employer may cancel the contract at any time for a legitimate reason if the contract’s term is unlimited, provided that the employer shall give the employee at least 30 days notice before the contract comes to an end. As per Article 123 of the labour law, if an employee ss dismissed arbitrarily, the concerned court may order the employer to pay compensation to the employee.

The court shall estimate this compensation according to the nature of the job and the damage caused to the employee, his service period, after investigating work conditions. The amount of compensation shall in all circumstances not exceed the employee’s wages for a period of three months calculated according to the last wage the employee was entitled to.

The said article further states that the above provisions shall not prejudice the employee’s right to the gratuity he is entitled to and termination notice compensation provided by the said article.

Therefore, in my opinion, you are eligible to get notice compensation, ticket to fly back to your country, compensation equal to maximum three months wages as decided by the court if the termination was without legitimate reason.

In case of a limited contract, if the employer terminates the employee other than the reasons specified in Article 120, the employer shall compensate the employee for his loss. The amount of compensation shall in no way exceed the wages due for a period of three months or the remaining period of the contract, whichever is shorter, unless a clause in the labour contract states otherwise.

Q: My friend used to work in Dubai. She finished her contract, and did not renew it, and went back to the Philippines. She got a six-month ban. Having finished the ban period, she wants to come back here but she has a problem with her credit card payment. She failed to pay the monthly dues from December 2009 until now as she could not enter the country before the end of the ban. Should she come back here; would she have a problem with the immigration authorities?

A: The bank which issued the credit card to your friend may have filed criminal/ civil case against payment default. I advise you to check whether there is any case registered against your friend or her name is blacklisted in the immigration system so that she will not be arrested as soon as she enters the country. Als,o ask your friend to verify the terms and conditions of the credit card to check whether there was insurance protection in case of loss of job. In any case, it is advisable to settle the matter with the credit card company before your friend returns to UAE.

Q: I have worked with a private company here in Dubai for 17 months. Four months after joining service, my employer cut my salary for six months and then I got my full salary back. Four months later they said there was not enough work and they had to let me go. Can I claim compensation for the six-month salary cut? Do I have to lodge a complaint with the Ministry of Labour?

A: Your question is not very clear to me. You may, however, file a complaint in the Ministry of Labour in order to claim your salary dues and other entitlements.


K.K. Sarachandra Bose is a Partner/ Corporate, Commercial and Contract Lawyer at Dar Al Adalah Advocates and Legal Consultants. Readers may e-mail their questions to: ktedit@emirates.net.ae, or send them to (Legal View), Khaleej Times, Dubai P.O. Box 11243.


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