‘Will switching to limited-term contract affect my end-of-service gratuity?’

Q

I have been working for the same company since 2019. In September 2022, they moved me from an unlimited to a limited-term contract, in line with UAE labour law. The company said that when resigning, employees will receive two gratuity payments – one from the first contract and another from the limited contract. I will be resigning soon and this means that I will not complete a year under the limited contract. Is the company required to pay a gratuity for these months?

AS, Dubai

A The employer has misunderstood that this change of contract does not affect the period of service in any way.

The end-of-service gratuity should be calculated as continuous service from the date AS joined the company.

Under the new labour law, there is no penalty for leaving employment before the end of the stated term.

AS is entitled to payment of an end-of-service gratuity calculated from the start of employment until her last day.

Article 51, which covers endof-service benefits for full-time workers, in the new law states: “The full-time foreign worker, who completed a year or more in continuous service, shall be entitled to end-of-service benefits at the end of his service, calculated according to the basic wage as per the following: a. A wage of 21 days for each year of the first five years of service; b. A wage of 30 days for each year exceeding such period.”

To clarify, this is one payment for the full period, calculated using the final basic salary.

If any employer says they will make two payments, they have misunderstood the law. The employee can point this out. If the employer persists with an incorrect calculation, the employee can register a case with the Ministry of Human Resources and Emiratisation.

I have a small business and want to take on people to do a few hours’ work each week. The women are sponsored by their husbands. Do I have to pay fees for someone who will work for four or five hours each week?

TO, Abu Dhabi

While it is possible to employ someone without providing them with a visa, assuming they are sponsored by a spouse or parent, there are further requirements.

If the visa states “housewife not allowed to work”, the husband must provide a “letter of no objection”. In addition, and in all cases where anyone is undertaking any paid employment, the employer must provide them with a contract of employment and a work permit. It is illegal to work without such a permit.

I left Dubai in 2008 with unpaid debts. I would like to work there again and pay off my debt quickly. I read that there is a law and a repayment plan implemented in 2020 that will allow me to repay my debt over an agreed period. Is this true? Or will I encounter a problem when I arrive in the UAE?

RA, South Africa

If someone has unpaid debts, it is likely that there is a police case, and that would mean detention on re-entering the UAE. RA will need to contact the General Directorate of Residency and Foreigner Affairs.

The easiest way is to call the Amer division. The number from outside the country is +971 4313 9999. They will confirm if there is a travel ban.

Assuming there is, RA will need to contact the bank(s) with which she has debts and discuss a payment plan that would lead to the bank cancelling the police case.

It is likely that she will need to make a lump sum payment and make further repayments before they will do so.

If a debt is outstanding for 15 years, it could be higher as interest will have been added, especially if no payments were made over the years.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 30 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @ FinancialUAE