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Drive Live Talks Legal. Our guest today is Ali Al-Assad from Yamalova & Plewka. Ali, how are you?
Ali
Fine, thank you. How are you?
Host
Very well, thank you. Good to have you back. I think we might kick off with a question first, Ali. Actually, we could start with this one that’s come in. It says, if a company does not renew your visa with an unlimited contract, can you still claim arbitrary dismissal?
Ali
So basically, in the event we have an employee who’s under an unlimited contract and their visa expires, as we know, you are not allowed to work for a company unless you have a valid employment visa. If the company decides not to renew the visa, and this decision is from the company, not the authorities refusing it, then in a way, they are forcing you out of the company. You may have a good argument about arbitrary dismissal.
Host
Okay, let’s bring in one of the topics, actually. We’ve got a number of things to get to, but just as you came in, Ali, you mentioned something about the Civil Procedures Law. We’ll come to that. Just a reminder, if you’re listening now and you have a legal question you’d like to put to Ali, he’s going to be here until five o’clock and can answer most things. He is our expert this afternoon. If there is something you’d like to ask but remain anonymous, that’s fine. Just text us at 4001 or use the free app with your question. It’s an open forum.
Host
Civil Procedures Law, an amendment—this is being enforced. It’s in the Official Gazette. I suppose this has just happened. We’re just reading this today. Could you run through the Civil Procedures Law—an overview—and then what the amendment is?
Ali
So basically, the Civil Procedures Law is the law that governs all the processes, obligations, and rights before the courts—whenever you have a court hearing or a court case. Anything related to representation of the parties, appearance of the parties, submission of documents, or attending meetings is governed by the Civil Procedures Law.
The new amendment we have now is, as we know, the regular way: whenever there’s a hearing, both parties must appear in front of the judge. You have to submit your documents, attend expert meetings, and everything must happen in person or through a lawyer. The physical presence of either the lawyer or the party is mandatory.
Under the new amendment, the court is considering, in certain situations, allowing parties to appear virtually—through conference calls, video calls, or other technological tools. The law, issued recently, is Law 10 of 2017. However, it won’t be implemented immediately. It will take some time to formalize and issue the required bylaws for this shift—from regular courts to e-courts or virtual courts.
Host
And Ali, will it be a case-by-case basis whether something qualifies for this virtual system?
Ali
Yes, as per the amendment, the court process will remain as it is, but it’s up to the judge to refer certain cases based on their aspects. For now, we don’t have specifics on which cases might qualify, but most likely, cases involving parties based outside the UAE—such as multinational companies or individuals unable to appear in person—will be prioritized. For example, if a CEO cannot attend every hearing, this service might be considered.
Host
I guess this is an efficiency move. It should help speed things up in the court process?
Ali
Exactly. It will ease the process and shorten the time. For instance, hearings are sometimes postponed because one of the parties cannot appear. With this system, they can attend virtually, and there’s no excuse of being out of the country. It’s more efficient and cost-effective, as it avoids the need for flights and other logistical challenges.
Host
Okay, we’ve got quite a few questions in, Ali, about VAT. We’ll come back to those shortly. Here’s one from Imran: if someone runs away and exits from the UAE, can a company ban that person? Is it possible?
Ali
So basically, I understand here we’re talking about an employee who left without notice. There are two aspects to cover: termination and abscondment, and potentially a ban.
If the employee is outside the country, they cannot be reported as an absconder because abscondment requires the individual to be within the UAE. However, if the employee has been away from work for more than seven consecutive days without a valid reason, this is grounds for termination under Article 120 of the UAE Labour Law.
Once terminated under Article 120, the employer can approach the Ministry of Labour to request a one-year ban. While the standard ban is six months, a one-year ban can be requested in cases of termination under Article 120. The Ministry will decide whether to approve the request.
Host
Thanks, Ali. Let’s move on to VAT, as there are a lot of questions coming in about this. Here’s one: if 5% VAT is added to prices, will it cause prices to become uneven since we don’t use single fils in the UAE?
Ali
This situation will arise from time to time. However, when buying multiple items, the fractional fils will add up and be rounded accordingly. For example, if your bill is AED 100.35, the final amount may be rounded either up or down, depending on whether it’s above or below 25 fils.
Host
And what about remittances? Saqib texted in and asked: will money transfers or remittances made through exchange companies be subject to VAT starting January 1?
Ali
Yes, but only the exchange fee will be subject to VAT. For example, if you’re transferring AED 10,000, the main amount remains unaffected. However, if the fee for the transfer is AED 50, then 5% VAT will be applied to that fee, making it AED 52.5. The principal transfer amount—AED 10,000—remains unchanged.
Host
Here’s another one: what if someone buys services overseas? Do they still have to pay VAT?
Ali
Technically, yes. If you’re importing a service, VAT applies. However, practically speaking, for individuals purchasing a service as a one-time transaction, enforcement may be challenging. Businesses with regular transactions are more likely to face VAT obligations on imported services.
Host
Thanks, Ali. Another question has come in from someone asking about banks. My brother changed his company, but his visa is still under process. The bank has blocked his account and frozen his funds. They told him he must cancel his two credit cards to access his funds. Can a bank do this?
Ali
Most likely, the bank has detected an outstanding amount on the credit cards. This is common when an individual changes jobs, as the bank sees a risk in losing the person’s income source.
When you sign a credit card agreement, it often states that defaulting on one payment makes the entire balance due immediately. The bank can use this clause to justify freezing the account. If the amount frozen exceeds the outstanding debt or if there’s no debt at all, your brother should approach the bank directly.
If they don’t cooperate, he has the right to file a complaint with the Central Bank against the bank for unfair practices.
Host
Moving on to another topic: Wills. Mark asks, does the new Law 15 replace the need for DIFC Wills for properties?
Ali
No, it doesn’t replace DIFC Wills. Instead, it provides an alternative. Now, you can register your will either with the Dubai Courts or with the DIFC Wills Service. It’s up to you to choose the option you prefer.
Host
Okay, and here’s a question from someone whose employee went on leave, emailed their resignation from abroad, and has since deleted all contacts. How do they cancel this employee’s visa?
Ali
There are two options here. The first is to wait six months. If the employee remains outside the UAE for more than six months, their residency will automatically be canceled. After that, you can clear their record with the Ministry of Labour or the Free Zone authority.
Alternatively, some Free Zones allow you to cancel residency without submitting the passport. Check with your licensing authority for the exact process.
Host
One follow-up from the same person: they’re concerned about WPS compliance if the visa stays open. It’s a Dubai visa—what should they do?
Ali
As long as you’re transferring at least 80% of the company’s salaries through WPS, there shouldn’t be an issue. If a problem arises, explain the situation to WPS and provide immigration records showing that the employee is abroad. This should resolve the matter.
Host
Thank you, Ali. We’ll take a short break now, but when we come back, we’ll dive into more of your questions. Keep them coming to 4001 or via the free messaging app.
Host
Welcome back to Drive Live Talks Legal. Our guest today is Ali Al-Assad from Yamalova & Plewka. Ali, we’ve got a few more questions for you. Here’s one: Hi, I’m a teacher on a fixed-term, renewable one-year local contract. I’ve been in the same job for over 10 years. I’ve found another job and given one month’s notice. Can the organization penalize me for breaking the contract? What about gratuity?
Ali
For a limited contract, if an employee wants to terminate it before its expiry, they must provide the notice period as specified in the contract. After giving notice, the employee can leave, but the employer has the right to claim compensation for damages caused by the early termination.
The compensation is capped at one and a half months’ salary, but the employer must prove the damages in court to claim this amount. It’s not an automatic deduction from gratuity or salary.
As for gratuity, since the employee has been working for over five years, they are entitled to full gratuity.
Host
Here’s another one about passports. This person asks: My employer is holding my passport. They informed me at the time of signing the offer letter, and there’s a clause in the letter that says they can hold it and return it when required. Now I want my passport back, but they’re ignoring my requests. What can I do without jeopardizing my job?
Ali
Legally, employers are not allowed to hold an employee’s passport, even if you signed an agreement allowing them to do so. You have the right to request your passport at any time. If they refuse to return it, there are two legal options:
- File a summary matter case: You can approach the court to request an order for the immediate return of your passport. The court will issue this order within 48 hours. You can then take this order to the police, who will enforce it and retrieve your passport.
- Raise the issue with relevant authorities: While the law protects you, practically speaking, pursuing legal action could strain your relationship with your employer. In some cases, employers might retaliate with warnings or even termination. It’s a tough balance to strike.
Host
Interesting. Let’s move on. Here’s a question from Horatio: Someone I know has run away and left the country, but they gave my name and number as a reference. Now, the banks are calling me. What can I do?
Ali
This depends on two things:
- If you signed as a guarantor: If you signed any documents guaranteeing the debts of this person, you are legally liable to settle those debts.
- If you’re just a reference: If you didn’t sign anything, the calls are simply a matter of harassment. You can ask the bank to remove your contact details from their system. If they continue to harass you, you have the right to file a complaint with the authorities for harassment.
Host
Thanks, Ali. Here’s another one: My family’s medical insurance expires on December 31. Is there a grace period for renewal, like with visas? If I don’t renew on time, will I face a fine?
Ali
The medical insurance law includes provisions for fines, ranging from AED 500 to AED 150,000, depending on the violation. For individuals, the fines are much smaller than for providers.
However, the real risk is being uninsured during the gap period. If anything happens medically, you’ll have to cover the expenses out of pocket, which could be far more expensive than the insurance itself. My advice is to renew as soon as possible.
Host
Good advice, Ali. Here’s another question: Will RTA fines have VAT added to them in January?
Ali
No, fines are not considered a service or a good, so VAT will not be applied. However, VAT may apply to services related to vehicle registration, licensing, and mechanical tests.
Host
That’s a relief for some, I’m sure! Let’s take one final question. This one is about rent updates: What are your thoughts on the recent changes to the RERA index?
Ali
Previously, the RERA index was updated quarterly. Now, it’s updated annually. The latest update includes more areas and even specific buildings. For example, in areas like DIFC, the index now lists specific buildings, which helps differentiate between high-end and basic facilities within the same area.
This specificity makes the index more useful, though we’ll need to wait for further updates to see how it evolves.
Host
That’s a wrap for today’s Drive Live Talks Legal. Ali, thank you for answering all these questions and providing such clear insights.
Ali
Thank you for having me. Always a pleasure.
