Tim Elliot: Hello and welcome to Lawgical Lite, part of the regular weekly series from the Dubai-based law firm, HPL Yamalova & Plewka, the Gulf Region’s first and still the only legal podcast. Here is Ludmila Yamalova. Nice to see you.
Ludmila Yamalova: Always a pleasure to see you, Tim. Thanks for being back here. I’m happy to chat with you, as always.
Tim Elliot: Just a quick question for you here. We were talking about visas and overstaying visas in a recent podcast, talking specifically about people who have a residence visa, an employment visa, and we were talking about the situation of overstaying and how long the grace period is once a visa has been cancelled. Thirty days was the answer. But I had this question and I wanted to come back to this. Let’s say I overstay my residence visa. I love it here in the U.A.E. I want to stay. My kids are at school. They’re happy. My wife is here. Bizarrely, she’s happy with me. I’m looking for a new opportunity during that grace period. Now, if I overstay that 30-day grace period, having had a residence visa, employment visa, who’s liable for the overstay? Where is the responsibility? Is it the ex-employee or is it the company? Also, can a company be fired or held responsible if an ex-employee overstays that visa?
Ludmila Yamalova: It’s a great question because there are two ways at looking at answering that particular question. One is legal and the other one is procedural. Legally speaking, the whole idea in the U.A.E. that exists of sponsorship, i.e., when you work for a company and you have that residence visa, it’s done under what so often is referred to as under the sponsorship of the company. The idea of sponsorship is that the company is responsible for you, so once the company applies for your visa and now your residence visa has been issued by the company, you are what we often refer to as under company sponsorship. The idea of sponsorship is the company is responsible for you for as long as you are registered under their name by virtue of, obviously, employment, but also the immigration status. Now, when does that immigration status officially end? Your question is: My visa has been cancelled now. The company has cancelled my visa, though obviously even though I’m still in the country, but the company should probably no longer be responsible for me because the visa has been cancelled. But the way the system of sponsorship and residency works in legal terms is that the company actually continues to be responsible for you until you have left the country or until you have gone on to a new visa. The reason for this – we speculate, but it’s probably an accurate way to describe it or explain it – is that the U.A.E. government is very welcoming of companies coming here and setting up business and citizens of all parts of the world coming here and working here, but they don’t want to be stuck with foreigners who no longer have employment and who are still in the country, so they want the companies to continue to be responsible for the employees who they have hired either by virtue of bringing them from the outside or by hiring them here. But as long as they are their responsibility, the government wants for the companies to continue to be responsible until either that person has left the country or is the responsibility of somebody else by virtue of, for example, them getting another job. That is the logic behind it. Therefore, from a legal standpoint, to answer your question, the company really remains liable for that person until – in our scenario, it’s you, for example – you have either left the country or you now have a new visa.
The way for the government to monitor that is when the company applies for your residence visa it has to pay what’s called a deposit to the immigration authorities for your visa. The company does not get the deposit back until you have actually exited the country. This is why the process exists that when you exit the country on your cancelled residence visa or you’ve now joined a new employer, you need to send to your previous employer either a copy of your exit stamp that you left the country or a copy of your new visa with a new employer. With that evidence, either the exit stamp or a copy of the new visa, the company will then go to the immigration authorities and will get its deposit back. The company remains responsible for you and that is the mechanism that exists for the government to ensure that the responsibility continues since the deposit is actually linked to the proof that the company has ensured that you are now either out of the country or legally employed by someone else.
Tim Elliot: Hence the terminology used in the Emirates that if you have a visa in your passport, there is a sponsor of that visa. That could be the company sponsoring you. That could be your spouse, a husband sponsoring a wife, for example.
Ludmila Yamalova: Correct. This is the legal explanation to that question. But the practical explanation, using you, I will go back to you as an example, now you have overstayed the visa and yes, legally as a company I am responsible, but in practical terms, now let’s say 50 days after your visa has been cancelled, you found new employment. What do you do? Because there are fines that have accumulated after the additional 20 days of your overstaying. Who’s responsible for paying the fines? In practical terms, now you have found employment so for you to actually switch your visa now to the new employer that fine has to be paid, and who is going to pay the fine? Your previous employer or you, the employee who actually is now looking for another employment, and you have a chance of new employment.
Tim Elliot: Since this is me, my fingers are crossed.
Ludmila Yamalova: Correct. But in your case, it would be in practical terms, this is where although legally speaking it is the responsibility of the company to make sure that you have left the country timely, when there is a fine in practical terms it will be that employee or that person who will have to bear the fine in order for them to now be able to qualify to apply for the new residence visa or, for example, to leave the country. But where the company’s responsibility continues is, in the example, this would perhaps not be you, a former employee stayed in the country for let’s say 60 days, and he or she was not able to find another job, so now they are leaving the country. Now, they are at the airport because they have no other choice. They are leaving the country, but they need to pay extra 60 days of fines for overstaying, and they, just in practical terms, don’t have the money to pay for those fines. What do you do as the company, who is ultimately still responsible in legal terms for that employee until they have left the country? Their name is still attached to your residency and to your company profile in immigration terms until that person has left the country. What do you do? Here, if the employee does not have the money to pay for the overstaying visas, because it can be quite substantial, so if you stay here for 60 extra days and you paid 25 for each day and 100 dirhams for the first day, for a lot of people, fast forward, it could be a lot of money. In that case, this is where that legal responsibility and the practical circumstance come together and in many cases it’s should be in the company’s interest at that point to pay the employee’s or that person’s overstaying fines so that they exit the country and now as a company you can now go and present to the immigration authorities that the person has now exited the country and now that person can be permanently removed from the company’s register.
Tim Elliot: What if there is a dispute, of whatever sort, over a termination?
Ludmila Yamalova: This is a great question because there have been a lot of examples of people that go through a dispute and in parallel to their legal dispute with the employer, for example, they are having other issues such as the visa has ended or has expired in the meantime. Or there is another spin to it, and let’s say your visa has expired, but you cannot leave the country because of your medical conditions. We’ve seen many cases in both situations. Let’s make a specific example. Let’s say there is an employee who is not agreeing with their employer’s termination and then there is a dispute that is in court. But in the meantime, the visa expires. What happens? Obviously, because he or she is litigating the case in court, they believe that they have a strong chance and they either do not wish to leave the country or just don’t have the resources to leave the country, so they’re waiting for this case to be resolved. Or in some cases, their medical condition does not allow them to leave the country because they’re in the hospital, for example. They’re not in a position to travel. What happens? These kinds of circumstances fall under what are called special circumstances with the authorities, and there are avenues to reduce or waive overstaying fines altogether. In the case, for example, an employee who has been in a dispute with a company and the visa has ended or expired in that period of time and then fast forward six months, now the case has been resolved. There are six months of overstaying fines. Then that employee has the option of going to the immigration authority and presenting all the court papers and showing particularly there was a final resolution to the dispute and in that case the authorities do waive or at least reduce the fine significantly. We are talking about 80% to 90%. Now in cases of people who perhaps have overstayed their visas because of their medical conditions, the fines can be waived altogether. There are mechanisms to account for these special circumstances.
Tim Elliot: Let me stay on a medical theme. What about company provided medical insurance? All visas are issued these days contingent on medical insurance being part of the package, if you like. That needs to be in place. By law, does medical insurance have to still be in place for 30 days as the visa is cancelled? Is that correct?
Ludmila Yamalova: That’s the question that relates to the responsibilities that are attached to the sponsorship and the immigration status, just like the visa. As of a few years now, Dubai has now introduced medical insurance as part of the necessary requirements for companies to employ. Abu Dhabi, in fact, has always had that, so if you were working in Abu Dhabi 10 years ago as part of your employment, the companies were required to provide you with health insurance. Dubai has followed suit a few years ago and more and more emirates are doing the same. At present, when your employed there are two condition or two relationships that stem off of that as far as the company is concerned: (1) The visa and (2) the other is insurance. Similarly so, after the termination, the resignation, or the end of your employment, now just like the visa is now being cancelled, what happens with insurance? Insurance is an interesting one because the way the system exists today is that it is actually linked to your visa. The way it is linked to your visa is not legally so to speak, but more procedurally. In other words, when you apply for sponsorship of your employee as a company, then you have to present to the immigration authorities proof of health insurance that is actually registered to you as a company in order for the immigration authorities to even process the request for the visa. Again, it’s not so much that legally in order to have residency you must have this, but procedurally the company has to present in order for the authorities to even process the request. At the end when you terminate employment, what happens? Well, the health insurance, in legal terms, is actually linked to employment. In other words, it’s a benefit that is linked to your employment relationship. If I am the company and I have hired you as my employee, I offer you this health insurance as part of your employment, not as part of your immigration, but as part of your employment, in legal terms. Therefore, now let’s say I have terminated you. In legal terms, I no longer need to provide you with health insurance because that’s the benefit that is linked to your employment. You are no longer working for me. You may still be on my visa because either we have a dispute or for some other reasons we have not cancelled your visa, but you are no longer working for me so you’re no longer getting a salary, you’re no longer getting any other employment benefits, and therefore, no longer should be entitled to the health insurance benefit. However, because as I earlier described, the health insurance is actually presented to the authorities as part of your immigration process, as part of your visa process, how do you cancel that insurance and can you cancel the insurance before the visa expires? In short, you can. Let’s say if there is a dispute and it’s now in court, the company can cancel health insurance while the visa is still ongoing. It’s possible. It’s allowed legally. It’s allowed in practical terms. Now, there is another aspect to it, however. As a company, you may want, it may actually be worthwhile for you to continue with the health insurance because as long as that person is on your visa, should anything happen to them, it may be in your interest as a company to at least have that insurance policy should any medical emergencies happen at least that person is covered because these instances do happen. Let’s say someone gets sick during that period of time. It is the time after employment, but still under your sponsorship and the person just doesn’t have the finances to pay for the medical treatment, then you as a company will be required ultimately to pay the medical bills, so that’s why in other practical terms it may be worthwhile for the company to continue the insurance coverage at least until the visa has been cancelled in order to just protect themselves. That being said, that insurance coverage does not need to be of the same perhaps nature as it existed before. I say this because a lot of companies offer very generous and very expensive medical coverage for their employees. You can see when somebody is not working, you may not want as a company to continue to offer that benefit. Perhaps what you can do is you can downgrade that insurance coverage for the time that the person is still under your sponsorship but no longer working for you.
Tim Elliot: Just let me be clear for a moment. In practice, most companies would tend to keep medical insurance open for that grace period of 30 days, having terminated a visa. Would that be a reasonable expectation for an ex-employee?
Ludmila Yamalova: Not quite because what you just said is that the visa has been terminated. Once the visa has been terminated, insurance terminates at that same time. That’s normally how it works. Because in this case, procedurally the medical policy is being submitted to the immigration authorities as part of the visa application. In most cases if the visa has been cancelled, then the insurance has also been cancelled. But there are ways for companies to extend it further, and that’s more contractual, but procedurally it’s just most companies cancel both visa and the insurance policy at the same time.
Tim Elliot: So be aware. Ludmila Yamalova is the Managing Partner of the Dubai-based law firm, Yamalova & Plewka. As ever, appreciate it.
Ludmila Yamalova: Likewise. Great chatting with you, as always. Thank you.
Tim Elliot: That’s another Lawgical Lite. If you’d like a question answered, will try in a future episode. It’s easy to get in touch. Just hit Contact at LYLawyers.com. Find us via any of our social channels or WhatsApp direct 00971 52525 1611.