Entitled to compensation

I have been working with a company here on a limited contract for three years.

By Mushtaq Ahmad Jan

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Published: Sun 15 Apr 2012, 1:58 PM

Last updated: Tue 7 Apr 2015, 12:39 PM

I have been working with a company here on a limited contract for three years. My contract will expire in July 2013. No new recruits have joined us and rumours have it that the rest of the employees will be sent home due to the company’s imminent closure. Can the company really do that? Are we entitled to any compensation? What are our options? Please advice.

Since your contract is for a limited period and if the company terminates you for any reason not mentioned in the Article 120 of the UAE Labour Law, you are entitled to a compensation not exceeding your three months total pay or for the remaining period of your contract whichever is shorter, unless the terms of the contract provide otherwise, in accordance with Article 115 of the labour law.

Therefore, it is necessary to review your employment contract regarding the compensation issue. If the contract provides any compensation in case of termination, then, it will be implemented. Otherwise, it will be decided according to Article 115 of the UAE Labour Law.

In addition to a return flight ticket, you will also be entitled to end of employment benefits in accordance with Article 132 of the labour law which states: “The employee, who has completed one year or more in the continuous service, is entitled to the end of service remuneration at the end of his service. Days of absence from work without pay are not included in computing the period of service, and the remuneration is to be calculated as follows:

  • Twenty one days’ pay for each year of the first five years of service.
  • Thirty days’ pay for each additional year, ‘Provided that the entire total remuneration shall not exceed two year’s pay.’

Mushtaq Ahmad Jan is a lawyer at the Global Advocates and Legal Consultants, with a Master’s Degree in International Commercial Law, University of Hull, Kingston-upon-Hull, England. Readers may e-mail their questions to: news@khaleejtimes.com or send them to: Legal View, Khaleej Times, PO Box 11243, Dubai.

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