Tim Elliot: Welcome to another edition of Lawgical Lite, the bite-sized legal podcast from Yamalova & Plewka here in Dubai. I’m Tim Elliot, once again on the 18th floor of Jumeirah Lakes Towers Reef Tower with Ludmila Yamalova, the Managing Partner. Nice to see you.
Ludmila Yamalova: Good to see you as well.
Tim Elliot: Here’s the question today: I have been working at this company in Sharjah. I have been working over here for the past one year. We have had quite a few projects over the past year but recently the issue is that I haven’t been paid for the past two months. I don’t know what exactly to do right now because I don’t know whether I should continue working with the hope of being paid or if I should actually go ahead and file a case. I don’t know. I’m not sure if I would be capable enough to handle the costs incurred in the case. What exactly do I do in this matter?
It’s a hard one to listen to. If you try to pay the bills, feed your family, and it’s something that we hear a little bit too often. What can you do, Ludmila Yamalova, in you’ve not been paid?
Ludmila Yamalova: It’s a tough one, indeed, as you said. Unfortunately, all too often we hear cases like this. It’s especially difficult for those who can’t afford to hire a lawyer, could not afford really to go without a salary for very long, not that many of us can but certainly it’s that much more heart wrenching to hear stories of those who are the breadwinners for their families and if they don’t get paid, even though technically speaking they appear to have a job but financially there isn’t really proof of that. What can you do? The natural question is why are you working if you’re not getting paid? But that’s easier said than done, especially because in the U.A.E. so many of the residents in the U.A.E. rely on that employment for purposes of a residence visa. Without employment, they cannot stay in this country. They may have children and families here and in many cases those children and family members are linked to the employed person’s residence visa. If you leave your job, then your whole family is uprooted. It’s easy to question the logic of staying in employment that is not compensating you, but in practical terms it’s very common and it’s difficult to walk away in this part of the world.
Tim Elliot: It is common. Let’s take this particular instance. It sounds like it’s been a few months for this person. The automatic reaction is well, I’m not going to go to work. Then I’m going to file a case. Is that what you should do?
Ludmila Yamalova: Well, many people don’t want to do that because they worry that if they do that, then they will be terminated right away, and if they’re terminated, they worry that they will lose their visa and it will affect their whole family negatively. That’s why many people, as natural as it may sound to some of us to file a court case, many people do not want to do that, and they look at this as a last resort. That being said, if you’re not getting paid for a while, it may be that this is ultimately the only option for you to do. Some people still harbor hope that maybe they will get paid and they will get paid for the previous months in which they haven’t been paid, and this is why they continue to cling on. Well, at some point, obviously, you need to make a decision. If you believe that time has come because you are not certain that you will ever get paid, let alone for the months for which you have not been paid already, then the difficult decision of taking a formal course of action is just a matter of time. If you have come to that place or that position, then yes, ultimately the only way for you to try to change the situation, unless your employer will pay you, is to take a formal court action. To do this, in practical terms, you can do one of two things, depending on where you’re based in terms of your company’s location. If you are in a free zone versus mainland, then the process is slightly different. If you’re in the free zone, then you need to first apply with the free zone authority for what’s called the mediation. That’s where you lodge your complaint and then the mediation team within the free zone will attempt to organize a meeting between the employer and the employee and attempt to mediate. In most cases, mediations are not successful, but it is a necessary step before the employee can take the case to court, or an employer for that matter. You do need to go through this mandatory mediation process and then if the mediation is unsuccessful, you need a transfer letter from the mediation center for you to file a case with the court, so that’s the second step.
Now, if you are working for a company that is on the mainland, outside of a free zone, then you can go directly to the Ministry of Human Resources, what is called the Emiratization of Human Resources or previously known as the Ministry of Labor and you lodge your complaint there. At that point, the ministry once again will attempt to conduct a mediation. If mediation is not successful, once again they will issue what’s called a transfer letter for you to go to court. In employment cases, whether you are in a free zone, outside a free zone, the step to file a court case is first mediation, and then if the mediation is not successful, to receive a transfer letter to apply to the labor court. It’s important to highlight that there is a labor court that has exclusive jurisdiction over employment cases. It’s not like you can just go to commercial court, for example, and file there because they do not have jurisdiction over employment cases. That’s, in short, the process of filing a court case.
Now, with regard to payments, and this is why a lot of people, like in this listener’s case, are afraid of going to court because of the cost. They worry how much it’s going to cost for them to file a claim. Because if you haven’t been paid for a few months already, then for you to spend more money to file and pay court fees, obviously, is an additional burden. For employees for claims under 100,000 dirhams, there are no court fees. In other words, in this case, in our listener’s case, if he wanted to file a court employment case, then he would not have to pay any fees. However, the proceedings in courts are in the Arabic language, so therefore, the pleadings and everything else will need to be presented in Arabic. That is not to say that you need to speak Arabic. You can use legal translators and have them translate your documents. Obviously, there will be a cost to that, but it’s not that expensive, especially in a simple case.
Tim Elliot: If you don’t speak Arabic, but you have a friend who does, could a friend translate for you live in court?
Ludmila Yamalova: No. That is not allowed. Only court appointed or court licensed translators can officially appear before the judge and assist with translations. Similarly, any documents that you want to submit to the court, if you, for example, want to submit your bank statements or your contract and if you need to translate them into Arabic because they’re not originally drafted in Arabic, then it’s not that your friend can attach an Arabic translation. They have to be legally translated and that is with a stamp of court licensed translators.
Tim Elliot: Is there any rule of thumb, if you like, as to how long a case like this might take in court?
Ludmila Yamalova: The whole idea of labor courts is that proceedings have to be a lot more efficient and a lot simpler, if you will, than in the commercial court. This is why. The whole focus here or the objective is for the judges to move the proceedings quickly. Obviously, because we’re talking about people’s livelihoods, so that’s the whole idea. Labor courts are dedicated to these issues alone. The judges are much better versed in employment cases, and therefore, the process in theory has to be much more efficient than any other civil matter for example. Depending on the nature of the case and the complexity of the case and also whether the other side will challenge and the arguments they will present, it can be as quick as perhaps two to three months, and it could be as long as a few years. It again depends on the other side’s response. But generally speaking, with employment cases we’ve seen cases go all the way from the court of first instance to the court of appeal and a court decision in one year, and we’ve seen employment cases that have lasted longer, but they’re usually a lot more complicated. A case like this, where an employee just has not been paid, they are usually much faster, so I’d say perhaps it’s realistic to expect a decision between three to six months.
Tim Elliot: If you have taken the step to make a case because you’ve not been paid, should you still be going to work?
Ludmila Yamalova: Arguably yes.
Tim Elliot: By the letter of the law.
Ludmila Yamalova: Yes. It’s a great question because they are not mutually exclusive. It’s not that just because you have filed a court case somehow that amounts to an automatic termination. It’s not like you are now not allowed to go to work, but in practice, in real terms, if an employee has filed a court case, he needs to be prepared that the company will have terminated them. Now this is expected, but obviously just because you’re filing a case, you do not need to feel pressured to resign yourself. One way or the other, what’s important to highlight is that under such circumstances where an employee has not been paid for three months, even if the employee decides to resign either because in the meantime he or she has found another job or because ultimately they need to move on because they cannot sustain their existence here without being paid, whatever the reason may be, resignation under those circumstances can be considered what’s called a constructive dismissal. Even though you resign, the court will treat that as being terminated. This is also one of the reasons why so many employees would rather continue to work even though they’re not getting paid because they’re afraid that if they resign they will lose some of the benefits that they would otherwise be entitled to if they were to be terminated, and under the U.A.E. law there is a difference. If you resign, depending on the circumstances, but in many cases, you would lose a number of benefits versus being terminated. In this case, however, under these circumstances the court would deem this to have been as a constructive dismissal. In other words, you have been forced to resign for obvious reasons because you’re not getting paid, and in that case, the court will look at this as an arbitrary dismissal. Then you could claim all of the other benefits that you would otherwise be entitled to if you were terminated outright. Cases like this would be at least a month notice, unless the contract provides for something else, and for arbitrary dismissal usually it is three months additional compensation when you’re being terminated without good cause. You could claim here an arbitrary dismissal and a one-month notice and any end of service if you’re entitled to it after one year as long as you’ve worked for the company for at least one year of service.
Now what’s also important is that if you continue to work for let’s say six months without being compensated, you can also prejudice your case quite negatively. This is because, let’s say you have worked for the company for now seven or eight months and you haven’t been paid or you’ve been paid sporadically, here for one month, a half a month or so, now finally you resigned because you’ve had enough and you file a court case. Now the court will look. It will ask you to present your average salary for the last six months. Well, if you look back at your last six months, your salary is pretty small. This is the danger. The danger is that if you wait for too long, it will be more difficult to argue that you have not been paid. As long as there’s some kind of payment obviously, but the courts may, or at least the other side may argue, and this is a legitimate argument, that you’ve ultimately accepted your salary to have been amended. Therefore, they will look in terms of, for example, bonuses or end of service, elements which are based on average salary. Courts usually look at six months. They will look at the last six months. Now, instead of getting paid, let’s say, 10,000 dirhams a month, on average you’ve been getting paid 3,000 dirhams a month, then chances are they will take the 3,000 dirhams a month as the average salary versus 10,000 dirhams, so be very cautious and don’t wait too long.
Tim Elliot: What if you can produce an employment contract that states salary?
Ludmila Yamalova: Great question. The employment contract can be amended in different ways: (1) By another written document or (2) implicitly or by practice. This is how the law looks at this is that you’ve continued to stay with a company under different terms, therefore, you have consented to your employment terms being amended by virtue of continuing to work under new terms. In other words, your employment contract has now been amended downward. But the same logic applies upward. In other words, if your employment contract says your salary is 10,000 dirhams but in fact you have been receiving 20,000 dirhams, the courts will not accept the 10,000 dirhams that is stated in the contract but will rather look at what it is that you have actually been getting paid. It works both ways.
Tim Elliot: Before you resort to filing a case, let’s just backtrack slightly. You need to sit and think very carefully, but you also need to talk to your employer and that really should be the starting point, shouldn’t it?
Ludmila Yamalova: Absolutely. I would guess that in most cases employees do talk to their employers, and this is why they continue to stay because they’re perhaps being promised the salary is imminent. But before you file a court case, absolutely, make it very clear to your employer and see if you can reason with them before you commit those resources. That being said, in practice we often see that until there’s a formal court case, employers tend to dismiss what they view as baseless threats or empty threats, but once you actually file a court case and then get a call from the mediation centre, be it through a free zone or through the Ministry of Labor, often the response is different. Do talk to the employer before you decide to file a formal court action, but manage your expectations because chances are you will have to file first before they come to the table and have a meaningful discussion with you.
Tim Elliot: That’s another edition of Lawgical Lite, what to do if you’re not being paid your salary on time here in the U.A.E. Every week we try to answer your legal questions either in our Lawgical Lite bite-sized podcast or in our slightly more detailed full length Lawgical podcast. We’d like to hear from you. If there’s a legal question you’d like answered, whatever it might be, we’re happy to try to answer it. Of course, if you prefer a legal consultation with a qualified legal professional, just hit Contact at Lylawyers.com. You can also find us via our new WhatsApp number, 00971 52 525 1611. Wherever you find your podcasts, look out for our full length Lawgical podcast discussions or our bite-sized Lawgical Lite podcasts, like this one. There’s something new every week.
