What is penalty for ending limited contract early?

I have resigned from a company where I was employed on a limited contract. I only worked for one year and five months, and my contract was for two years. I know I will have to pay a penalty of 45 days. I’ve read in your column that the 45-day salary payme

It disappoints me that companies want to have things all their own way. End-of-service benefits are calculated using a basic salary so companies will often try to keep that low. This basic salary must then also be used when calculating penalties payable, such as for breaking a fixed-term contract. The latest version of the UAE Labour Law, as available from the Ministry of Human Resources and Emiratisation, formerly the Ministry of Labour, states in Article 116: “... the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract, provided that the amount of compensation does not exceed the wage of half a month for the period of three months, or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.” This is the clarified wording as amended by Federal Law No 12 dated October 12, 1986. The previous wording referred to “pay” but the revised wording makes it clear that the actual salary, the wages payable, is to be used for the purpose of the calculation of the penalty, not the full package of benefits. I presume that KH’s employer is using the old wording.

Can I cancel my employment visa at the nearest immigration office within days of resignation, so in less time than the one-month notice period required in my contract, and still be eligible to receive my gratuity? I have been employed by the company since February 2015. I have found alternative employment in Canada and need to start immediately. ML, Dubai The terms of ML’s contract state that one-month’s notice is required to leave service so as he accepted the contract of employment, he must also accept and comply with these terms. An employer has the option to allow someone to leave sooner if it suits them, but the employee does not have any right to a shorter notice period. He is employed in a free zone, so the free zone itself is his sponsor, but he cannot just go and cancel his visa without employer approval. The process of cancellation should be initiated by the employer and due process must be followed. Leaving without having worked the required notice period can lead to an absconding case and a ban on either entering the UAE again, or the ability for future employment. Noncancellation of a visa can also lead to future issues on attempting to re-enter the UAE.

I am British and a few days ago I received a phone call from someone claiming to be with the department of work and pensions (a UK government department). He said he had been asked to call expats overseas, went on to ask if I had a private pension and claimed there have been recent changes for expats. When I told him I only have a civil service pension, he lost interest and said goodbye. When I checked the number, he had called me from Malta so I am confused. Was the call genuine? I don’t recall giving my UAE number to the UK government. JC, Abu Dhabi The Department for Work and Pensions is part of the UK government and is responsible for UK state pensions but its only involvement in private or corporate provision is to ensure that UK employers comply with the “auto enrolment” rules. It has no other input and does not keep records of people’s private pension plans, ask any questions or give any advice on this topic. It also does not have an office in Malta. It appears JC has been contacted by a salesperson looking for someone with a private pension arrangement that could be transferred. A civil service pension is part of a statutory scheme and this cannot be transferred to a private plan. Most of us today have information about ourselves in the public domain and being cold called is common, no matter how much we may dislike it. The issue here though is that the person making the call lied about who they were and their intentions. That is fraudulent and even criminal in some jurisdictions. The UK government does not contact expats about pensions and anyone who receives such a call should end it immediately and not partake in any discussion. An ethical financial adviser would not lie about who they are in this manner.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

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