Legal view

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: or send them to (Legal View), Khaleej Times, Dubai 
P.O. Box 11243.

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Published: Tue 30 Nov 2010, 12:00 AM

Last updated: Mon 6 Apr 2015, 4:13 PM

Wage including allowances can be deducted on leave without pay

Q) This year I had taken a leave more than my entitlement due to some emergencies at home. The excess leave was taken as leave-without-pay by my company and my salary for the extra days was deducted. For the purpose of deduction, the company has taken my full salary into consideration. My salary consists of basic pay as well as transportation and housing allowances. I understand only the basic pay is to be considered. What is the existing law on loss of pay calculation?

A) As per Article 89 of the UAE Labour Law, an employee who does not report back to work directly after the end of his leave shall be deprived of his wage during the period of his absence starting from the day following the end of his leave. Said Article reads as follows: “Subject to the provisions of the Labour Law, any worker who fails to resume work immediately after the expiry of his leave shall automatically forfeit his wage for the period of his absence, with effect from the day immediately following that on which the leave expires.

In the Labour Law, ‘Wage’ and ‘Basic Wage’ have different definitions. ‘Wage’ is defined as follows: ‘Any consideration, in cash or in kind, given to a worker, in return for his service under an employment contract, whether on yearly, monthly, weekly, daily, hourly, piece meal, output or commission basis. The wage shall include the cost of living allowance. It shall also include any grant given to a worker as a reward for his honesty or efficiency, provided such amounts are stipulated in the employment contract or in the firm’s internal regulations or are being so customarily granted that the firm workers regard them as part of their wage and not as donations. Basic wage means ‘the wage specified in a valid employment contract, exclusive of any allowances whatsoever.’ As per the definition of the Wage provided in the law, it shall include cost of living allowances given to the employee. Therefore, in my opinion, your company’s action is justifiable.

Q) Once a cheque is dishonoured from the bank for insufficient funds or due to closure of the account, what is the maximum period for filing a legal suit or to file a police case against the drawer of the cheque? Similarly, can a legal suit be initiated against the issuer of cheque, if it has been dishonoured as the cheque has become stale? As per central Bank of UAE, when is a cheque considered stale?

A) The maximum period for filing civil case is two years from the date of bouncing of the cheque due to insufficient funds and to file a criminal case, the maximum period is five years. A cheque must be presented for payment within six months from the date of the cheque. A drawee may effect payment of the cheque even after expiry of the date mentioned on the cheque. There are instances where the courts considered the cases of dishonoured cheques due to being stale. In such circumstances the courts may check whether there were sufficient funds in the account of the issuer of the cheque on the due date of the cheque.

Q) I have been working in a company for the last 22 years. Now, I have resigned the job and decided to cancel my visa. Normally our company takes the signature from the employee, as received all dues, before cancelling the labour card and after cancelling the visa they release the settlement. I would like to get the advice that, in case of any dispute or complication, is it possible to take up the matter with the authorities for getting the settlement after signing as received the settlement. Will there be a ban of six months when cancelling the visa?

A) Once you sign a document stating that you received all your dues, then the burden to prove that you have not in fact received your dues will fall on you. Therefore you may sign such documents only after getting all your dues. In respect of six months’ ban, this normally depends on the type of the contract that you have with the employer.

Q) We are working in an establishment for more than 30 years. Due to some problems, our sponsor could not renew the trade licence of the organisation and our visa renewal is pending for more than two months. Recently, he had transferred the ownership of the organisation to his daughter’s name and therefore the licence had been renewed in her name. As the new owner is going to sign our labour contracts, which are unlimited, is it necessary to settle our gratuity with the previous owner now or will it be considered as a continuation of the service?

A) As per Article 126 of the UAE Labour Law, where a change occurs in the form or legal status of the firm, employment contracts that are valid at the time of such change shall remain in force between the new employer and the firm workers, and their service shall be deemed to be continuous. The original and the new employers shall remain jointly liable for a period of six months for the discharge of any obligations resulting from employment contracts. After the lapse of that period the new employer shall solely bear such liability. — Compiled by Ahmed Shaaban

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