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Employer can impose labour ban if employee breaches contract

Ashish Mehta
Filed on February 21, 2016 | Last updated on February 21, 2016 at 06.58 am
Employer can impose labour ban if employee breaches contract

(Corbis)

An employee who may terminate his employment contract before the completion of the term may have to compensate his employer for any prejudice suffered by the latter.

Can you explain to me what happens in case of breach of limited period contract by an employee? I contacted the Ministry of Labour call centre regarding this and they told me that an employee will have to pay 45 days' salary.

They also said that the employer has the option to impose a labour ban on the employee. If an employee pays 45 days' salary to the employer, can a one-year labour ban be still imposed?

Pursuant to your question, it may be noted that the provisions pertaining to payment of compensation to the employer in respect of termination of the employment contract by the employee and the provisions pertaining to imposition of an employment ban are independent of each other.

Employer can impose labour ban if employee breaches contract (https://images.khaleejtimes.com/storyimage/KT/20160221/ARTICLE/308099960/V2/0/V2-308099960.jpg&MaxW=300&NCS_modified=20160221035838

Although both may culminate out of termination of an employment contract by the employee and may be imposed simultaneously, they are severable in their interpretation and implication in the context of the concurring provisions of the Federal Law No 8 of 1980 on the Regulation of Labour Relations (the "Labour Law").

Both the provisions may be simultaneously applied and one may not be imposed or waived as an exception to the other.

An employee who may terminate his employment contract before the completion of the term of the contract may have to compensate his employer for any prejudice suffered by the latter for the same. This is in accordance with Article 116 of the Labour Law.

However, the provisions shall be applicable only when the employment contract is of unlimited duration. The concurrent provisions of Article 116 may be noted which read as follows:

"Article 116 - Where a contract is revoked by the worker for reasons other than those specified in article (121), he shall be required to compensate the employer for any prejudice the latter sustains as a result; provided that the amount of compensation shall not exceed half the worker's remuneration for three months or the residual period of the contract, whichever is shorter unless the contract contains a provision to the contrary."

The provisions pertaining to imposition of labour ban follows the provisions of Article 128 and Article 129 of the Labour Law. Article 128 deals with the provision of law in respect of termination of a limited period contract and it reads as follows:

"Article 128: Where a non-national worker leaves his work without a valid reason before the expiry of a contract for a limited period, he may not, even with the employer's consent, take up other employment for one year from the date on which he left his work. It shall not be lawful for any other employer who is aware of the fact to recruit such worker or keep him in his service before the expiry of such period."

Further the provisions of Article 129 deals with the provision of law relating to unlimited period contracts:

"Article 129 - Where a non-national notifies the employer of his desire to terminate a contract of unlimited duration and leave his work before the expiry of the statutory period of notice, he shall not, even with the employer's consent, take up other employment for one year from the date on which he left his work. It shall not be lawful for any other employer who is aware of the fact to recruit or keep him in his service before the expiry of such period." However, it may also be noted that the foregoing provisions of Labour Law are not meant to be prejudicial to the interests of the employee and also they are not applicable in every case where an employee seeks to terminate the employment contract. The provisions pertaining to imposition of labour bans are applicable only in cases where an outgoing employee arbitrarily terminates the employment contract, that is, without a good reason on his part.

It may also be noted that labour bans may not be imposed in cases where the employer and the employee have mutually agreed to the termination of the contract, in accordance with Article 130 of the Labour Law, which states:

"Article 130 - The provisions of article 128 and 129 shall not apply to a non-national worker who, before taking up other employment, obtains the authorisation of the Minister of Labour and Social Affairs with the approval of the original employer."

Otherwise, the employee may not have to face an employment ban if he has a good reason to that effect or where the reason for termination of contract may well be attributed to the employer. This is in accordance with the provisions of Article 121, which states:

"Article 121 - A worker may leave his work without notice in either of the following case:

a) If the employer fail to comply with his obligation towards him, as provided for in the contract or in this Law;

b) If he is assaulted by the employer or the employer's legal representative."

Changing jobs 3 months after renewing contract

I am working on an unlimited period contract and hold an accountant's visa. I have a bachelor's degree. I have already completed two years with my employer and renewed my visa three months ago. However, I now wish to change my company.

I contacted the Ministry of Labour call centre and was informed that I need a minimum salary of Dh5,000 to avoid the labour ban. Can you tell me how to avoid the labour ban?

Pursuant to your question, it may be noted that the legal provisions pertaining to lifting of employment bans are provided under the Ministerial Order No. 1186 of 2010 on "Rules and Conditions of Granting a New Work Permit to an Employee after Termination of the Work Relationship in Order to Move from One Establishment to Another" (the "Ministerial Order").

In view of the provisions of the Ministerial Order, it may be noted that after the completion of two years of continuous service, an employee may not have to face an employment ban if both the employer and the employee agree to the termination of the employment contract. This is in accordance with Article 2 of the Ministerial Order, which states:

"Article (2) - The following two conditions must be met in order to grant the work permit mentioned in Article (1) of this resolution:

1. Agreement between the employee and the employer to conclude the work relationship.

2. The employee must have spent at least two years with the employer."

Pursuant to the foregoing, if you may also secure a no-objection letter from your current employer, no employment ban should be imposed on you.

It may be noted that employment bans are not imposed if after termination of an existing employment contract, one is subsequently offered a salary prescribed for one's professional qualifications. Since you are holding a bachelor's degree, the minimum salary that should be offered by your new employer must be at least Dh7,000, in accordance with Article 4 of the Ministerial Order which states:

"As an exception to the provision of the Item No (2) of Article 2 of this Resolution, the Ministry may issue a work permit to an employee without requiring the two-year period in the following cases:

a) In the event that the employee is starting his new position at the first, second or third professional levels after fulfilling the conditions for joining any of these levels according to the rules in force at the Ministry, and provided that his new wage is not less than Dh12,000 at the first professional level, Dh7,000 at the second professional level and Dh5,000 at the third professional level..."

Further, it is learnt that employment ban issued by the Ministry of Labour may not be applicable for entities established and based in free-zones of the UAE. And therefore, you may also explore the possibility to seek employment in such free-zone entities even if an employment ban is imposed on you by the Ministry of Labour.





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