No penalty for internal contract breach


No penalty for internal contract breach

Any contract which contradicts the provisions of Federal Law No. 8 of 1980 of the UAE on labour relations shall be deemed null and void in accordance with Article 7 of Labour Law.

By Ashish Mehta

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Tue 24 May 2016, 12:00 AM

Last updated: Wed 25 May 2016, 8:57 AM

My current employer is a professional services firm and I'm employed as an archives clerk (as stated on visa) on an unlimited contract. My date of joining was March 26, 2014, but the visa was stamped on my passport on April 28, 2014. The probation period listed on my labour contract was for six months and my gross salary is Dh3,500 per month. My employment contract - internal document, not labour contract - includes a clause to pay Dh15,000 if I resign in the first year or Dh10,000 if I do so in the second year.
I am a qualified chartered certified accountant and a graduate and have just been offered a job elsewhere for Dh7,500 per month. I have already given my resignation and am currently undergoing my 30-day notice period.
What I'm more concerned about is the proposed penalty rather than the ban, as I feel I would not be offered a job if changing jobs was not probable. Please advice me on my position regarding this penalty; is it legally payable? Can the employer impose a ban on me for not paying this penalty?
It is understood that you are a qualified chartered certified accountant working as an archives clerk under an unlimited period employment contract with a professional firm in the UAE and that you have completed six months of employment with the current employer. It is further understood that your current employer has provided you with an internal employment contract stating that you are bound to compensate your employer in case you leave the employment on your own accord before completion of two years of employment. It is noted you have already resigned from your current employment and subsequently another company is now offering you Dh7,500 as your monthly remuneration.
It is evident that the bilingual employment contract executed between you and your employer, filed with the Ministry of Labour is advantageous to you. Any contract which contradicts the provisions of Federal Law No. 8 of 1980 of the UAE on labour relations ('Labour Law') shall be deemed null and void in accordance with Article 7 of Labour Law which states, "Any stipulations contrary to the provisions of this Law, even if it was made prior to its commencement, shall be null and void unless they are more advantageous to the worker."
Normally the Ministry of Labour imposes a six-month ban for employees who resign from their employment before completion of one year of employment. But in your case there may not be a labour ban before completion of the one year of service. The Labour Law exempts certain professionals from a ban and permits them to change their employment.
This is in accordance with Article 2 of the Ministerial Order No. 13 of 1991 of the Labour Law on 'The organisation of the transfer of sponsorships of non-national labours the rules governing the same', which states, "Non-national labourers may be allowed to transfer one job to another and hence transfer their sponsorship if they fall under certain categories ..."
However the ban may be lifted by you or your prospective employer on the basis of your qualifications of a chartered certified accountant provided your degree is duly notarised and legalised from the country you obtained such qualification. Subsequently your degree also needs to be attested by the Ministry of Foreign Affairs in the UAE.
The Ministry of Labour or the Labour Courts in the UAE may not entertain the complaint of your employer in case you fail to pay the compensation of Dh15,000 for breach of contract as per internal employment contract. However, your employer may be in a position to file a civil case against you before the court of competent jurisdiction in the UAE. Your employer may not be successful to get Ministry of Labour to impose an employment ban on the basis of aforementioned non-payment of compensation to the employer as this issue is not within the jurisdiction of the Ministry of Labour.
Waiving overstaying fines in 'special cases'
My sister, who is based in Dubai, was recently accepted into a US-based university and has received an I-20 for her kids and herself. Her husband will not be going to the US since he runs his own company here in the UAE.
However, my sister, her husband and kids no longer have visas to stay in Dubai. To get a new permit costs thousands of dollars. And the penalties they've accrued since their visa expired is several thousands of dollars more. Unfortunately, they don't have the money for either a new permit or to pay off the penalties.
Can my sister and her kids leave Dubai permanently without paying for a new permit or the penalty?
I've been told that she will be stopped by the airport officials in Dubai even if she has valid air tickets and a US student visa. Is it true that the Dubai airport officials will put her and her kids in detention until they pay the penalty? What options does she have for leaving the country permanently? Does it help that she's a Syrian passport holder and neither she nor her kids can go back to Syria due to the civil war?
It is understood that your sister who is a resident along with her family here in Dubai has now been granted admission at a university in the US. Further, it is noted that since her husband is carrying on his business here in the UAE he is not willing to travel to the US. In continuance we understand that for various reasons the UAE residence visa of your sister and her children has not been renewed and has expired since a long time. We further note that your sister doesn't have the required funds to pay the penalties for overstaying in the UAE.
It is understood that a fine of Dh25 per day will be levied for each day of overstay. If your sister cannot afford to pay the amount of the penalties for herself and her children, they will all be deported from the UAE with a permanent ban prohibiting her and her children to return to the UAE.
However, your sister may as a special case request the General Directorate of Residency and Foreigners' Affairs to waive the fine in view of the current political and security circumstances prevailing in Syria. Your sister may contact the directorate for any further information.

Ashish Mehta, LLB, F.I.C.A., M.C.I.T., M.C.I.Arb., is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom, Singapore and India. He manages a multi-jurisdictional law firm practice, providing analysis and counselling on complex legal documents, and policies including but not limited to corporate matters, commercial transactions, banking and finance, property and construction, real estates acquisitions, mergers and acquisitions, financial restructuring, arbitration and mediation, family matters, general crime and litigation issues. Visit for further information. Readers may e-mail their questions to: or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.11243, Dubai.

More news from