Host
There’s just so much more to hear. Download our podcast at DubaiEye1038.com. Drive Live Talks Legal. And we’re joined in the studio today by our regular guest, the lovely Ludmila Yamalova from Yamalova & Plewka. Ludmila, how are you?
Ludmila Yamalova
Trying to stay cool. I cannot believe it’s still not letting go.
Host
No, it isn’t. It’s quite warm. I escaped for a few days over Eid. Did you manage to take such a break?
Ludmila Yamalova
I did, I did. But I think I also managed about a three-minute walk today, and it was tough.
Host
Yeah, it’s hot, isn’t it?
Ludmila Yamalova
Yeah. But we’re getting in the right direction.
Host
We hope so. In a few weeks, I hope we can walk more comfortably.
Ludmila Yamalova
Yeah, it’s… My birthday is normally okay here, which was a month ago yesterday. So we’re getting towards the time that’s going to be all right.
Host
Definitely. Much, much welcome.
Ludmila Yamalova
Yes, I can’t wait.
Host
So, Ludmila, we’ve got lots of questions in for you already. But just a reminder, if you do want to get a question to Ludmila as well, you can do it on the day, and you can text us at 4001 or via the free messaging app.
If you want to call her, because I know lots of people do sometimes prefer to call, it’s 04 871 5500. The lovely Esther is next door. She’s waving, ready and waiting to answer the calls and put you through. If you have questions, particularly when it comes to legal stuff, sometimes you need a bit more explanation because it’s more involved.
Ludmila Yamalova
Happy to take the call.
Host
So, Emma, you have question number one there for Ludmila?
Host
Yes, I do. This is one that was sent to me. A bit of an awkward situation.
Basically, there’s a lady who’s been looking for outside work due to this scenario: the company that currently sponsors her and for which she works has given her an NOC to work somewhere else until her visa runs out in January. The company is saying they can’t afford to pay the cancellation fees. She’s been to the Ministry of Labour and is under the impression she can’t force the company to pay her. It’s a commercial shop she’s been working for, and they’ve given her the NOC, which allows her to work elsewhere while still on their visa.
She says there are 14 employees in total who have been told they have to wait until January for their visas to expire and won’t get paid until then.
Ludmila Yamalova
This sounds like a terrible situation.
It is a terrible situation, and it’s also quite a multifaceted one. There are a few legal concepts here that are separate. One, for example, is the employment relationship, and the other is immigration or the residence relationship related to the visa.
While for most of us who are non-Emiratis, employment and residence visas often go hand in hand, they are legally two separate relationships. The company’s obligation to pay the salary should not be linked to the expiration of the residence visa, for instance.
Let me parse out the question itself.
First, the advice this particular lady received from the Ministry of Labour about not being able to force the company to pay might relate to the ministry’s own authority. The Ministry of Labour does not have the ultimate authority to enforce payment; they can start the process, but it’s ultimately the courts that have the authority to compel a company to pay.
The proper protocol is to start with the Ministry of Labour, file a claim, and then escalate it to the Labour Court. The courts have the authority to enforce payment. So, just because the company claims financial inability, it doesn’t mean no one can enforce payment.
Ultimately, this comes down to the payment of salary and other end-of-service benefits, such as notice periods, vacation days, commissions, or bonuses. If a company fails to pay, the employee must weigh the risks and benefits of proceeding with a court case.
For claims below AED 100,000, employees don’t have to pay a court fee, which makes it an inexpensive process. Employees don’t even need a legal advocate, though a translator might be necessary since everything is in Arabic.
But here’s the practical side: if the company truly has no money, even a favorable court judgment might not result in payment. If the company has no assets to settle the judgment, it’s just a piece of paper without commercial value.
Regarding the visa cancellation issue, typically, when a visa is canceled, the company receives a refund. It doesn’t make sense for them to claim they can’t afford the cancellation fees. The company’s refusal might just be a way to buy time to close the shop or restructure.
My advice to these employees is practical: if they benefit from staying on the company’s visa and can find alternative employment during this period, it might make sense to wait. However, if they doubt the company’s intentions, they should file individual cases in the Labour Court.
It’s important to note that there’s no right to collective action in the UAE. Even if all 14 employees are in the same situation, each must file a separate claim. They can collaborate on strategy but must present individual cases.
Host
Drive Live Talks Legal is here to answer your questions, and our guest Ludmila Yamalova from Yamalova & Plewka is providing clarity on your legal concerns. Ludmila, we’ve got another question that touches on similar themes.
This one says: “I work for a company in IMPZ in Dubai. I resigned on the 23rd of June, and my last working day was a month later, on the 22nd of July 2018. My employer has not paid me two months’ salary and gratuity up to my end date. They forcefully asked me to sign the cancellation paper, and my visa was canceled on the 16th of August.
I have an email from the vice president of the company dated the 24th of August confirming my settlements will be paid soon. The company mentioned in my settlement calculation that my dues would be paid upon visa cancellation as per their company policy. A few other employees have left recently, and the management followed the same process—visa cancellation first and then the settlement of dues. Can you advise me on how I can get my rights?”
Ludmila Yamalova
This question highlights a common misconception that once a visa is canceled, an employee may lose their ability to recover unpaid dues. Let me address this systematically.
First, the issue of signing the cancellation paper: employers often ask employees to sign a document as part of the visa cancellation process. This document typically states that the employee has received all their dues. Many employees fear that by signing it, they waive their rights to claim unpaid amounts later.
However, legally, signing that document does not bar you from pursuing unpaid amounts if you can prove that you did not receive them. The courts recognize that such a document, if signed under pressure or misrepresentation, does not override your right to claim what is due.
In this case, the listener has an email from the company confirming the settlement, which strengthens their position. The company’s claim that it is their policy to pay dues only after visa cancellation is irrelevant. Company policies cannot override UAE labor law.
Now, regarding the steps to recover unpaid amounts:
- Stay proactive and vigilant. Keep following up with the employer while ensuring all communications are documented. Since the vice president confirmed the payment, use that as leverage to push for a timeline.
- File a case if payments are not made. If the employer fails to pay within a reasonable period, your recourse is to file a claim with the Ministry of Labour, which will escalate to the Labour Court if necessary.
- Cost considerations. As mentioned earlier, for claims under AED 100,000, there are no court fees for employees. Even if the claim exceeds that amount, court fees and expert fees can be reimbursed if you win.
- No need for a lawyer. The process is straightforward. You’ll need to present your employment contract, evidence of unpaid dues (e.g., bank statements, emails), and any other relevant documentation.
Lastly, the listener raised a concern about being forced to sign the cancellation paper. It’s important to emphasize that no one can force you to sign any document against your will. If an employer tries to intimidate or coerce you, that could amount to a criminal offense. Employees should never feel pressured to waive their rights.
Host
Thank you, Ludmila. That’s very comprehensive advice. Let’s move on to another question. This one says:
“In a commission-based sales job, is gratuity based on the base salary or commission? This is in a free zone.”
Ludmila Yamalova
Great question. Gratuity calculations in the UAE are based on the basic salary, but it’s essential to understand what is considered “basic salary.”
For commission-based roles, commissions are considered part of the basic salary as long as they are paid regularly. The courts generally calculate gratuity based on the average salary, including commissions, over the preceding six months.
Allowances like housing, transportation, or food are excluded from gratuity calculations unless explicitly stated otherwise in the employment contract.
As for free zones, employment laws in the UAE apply uniformly across all companies, whether in free zones or not, unless a free zone has a specific law that provides additional benefits. In this case, the standard federal law would still apply, and commissions would be factored into gratuity calculations.
Host
A follow-up to that: What about annual discretionary bonuses?
Ludmila Yamalova
Discretionary bonuses are an interesting gray area. If a bonus is truly discretionary, meaning it’s irregular and depends on specific factors like company performance, it might not be included in gratuity calculations. However, if the bonus is paid annually and consistently without a clear formula, courts often view it as part of the basic salary for gratuity purposes.
The key question is whether the employee has a reasonable expectation of receiving that bonus regularly. If so, it can be factored into gratuity.
Host
That’s a helpful distinction. One last quick question on gratuity: if someone’s employment contract includes allowances that make up a significant portion of their total salary—such as supplementary allowances—do those count towards gratuity?
Ludmila Yamalova
Yes, supplementary allowances are often scrutinized by the courts. If they constitute a large portion of your salary—say, 75% of your total compensation—the courts are likely to view them as part of the basic salary, regardless of how they’re labeled. It’s not the terminology but the nature and regularity of the payments that determine inclusion in gratuity calculations.
Host
That’s all we have time for today. Ludmila, as always, thank you for your invaluable insights.
Ludmila Yamalova
Always a pleasure.
Host
If we missed your question, don’t worry—Ludmila will be back next week. In the meantime, visit lylawyers.com for more legal resources.