Zaid: Hello. Welcome. Welcome back to Lawgical with LYLAW. This is Zaid again. If you’ve listened to our previous episode, you know that Lawgical has shifted gears to a more question and answers-based format. In this upcoming segment, Ludmila is going to continue addressing some of the questions we’ve received from our listeners. If you’d like one of your questions to be answered on the show, feel free to reach out to us on our various social media pages. The names that we’ve used in these episodes have been changed in the interest of confidentiality. We hope you enjoy this segment and the ones to come.
Hanan: Ludmila, we received another question from a listener regarding filing a case against her employer. Sara asked the following question. I filed a case against my company for refusing to pay my service gratuity. Last year in September 2018 the court ruled in my favor with regard to a case I had filed against my employer. The judgment progressed to execution, but no payment has been made by my employer to date. What shall I do in order to enforce the judgment? What measures can be taken to secure my rights as per the U.A.E. labor law? I came to know that my visa had been cancelled without my signature. Currently, I am here on an overstay and in on-time court service they have told me that I can stay here after the cancellation of the visa when I have an ongoing case. I can stay here until the case has been closed, and once the case has been closed, they will give the letter for the cancellation of my overstay. What I need to know, is that possible? I would really appreciate your quick response.
Ludmila Yamalova: Okay. This question in relevant parts breaks up into two separate legal principles: One related to the enforcement of the judgment and one related to the U.A.E. residence visa and, in particular, overstaying of the visa.
With regard to the first part of the question, that is the one related to the enforcement of the judgment, it’s a very interesting question and a very relevant one because as Sara mentioned she took the case to court for her salary being unpaid or unpaid dues. She won that case and presumably she won it all the way to the final case because the case after that progressed to execution. Now execution, what it refers to is that when you have a court judgment and a court judgment is, as perhaps as scary as it may sound, the court judgment is just that. It’s a piece of paper on which the court, ultimately the governing authority, rules one way or the other. However, without any further actions that court judgment remains to be just a piece of paper unless parties either act on it amicably or something else happens. Well the something else sounds like in this case the amicable option was not available. The employer did not respond so therefore the employee had to take the court decision further, so that means enforcement, which means now you have a final court judgment and now you want to enforce it.
Now enforcement can be a very complicated process, in particular related to employee/employer relationships because ultimately what it entails is seeking assets that belong to the defendant in order to seize those assets and then liquidate them and settle the judgment. That’s in general terms what enforcement refers to. In this case, because it’s an employee/employer relationship, it’s difficult for an employee by virtue of his or her, in this case, her role with the company to actually know what assets the company might have owned in order to make enforcement an efficient and speedy process. This is because as part of enforcement the burden is on the claimant, in this case Sara, to tell the court which of the assets the employer owned or had and be able to identify those assets so that the court can issue relevant judgments to seize assets, freeze them, and then ultimately to auction them off. That’s what Sara is dealing with right now. Then at the end of the day, that’s the only way to make a judgment actionable. I encourage Sara to continue on with the process. Enforcement itself can take up to a year and locating the assets that belong to the employer is perhaps the lengthiest part. Some of the assets may be bank accounts, a company license, if the company owned any cars or any other equipment that might have been based or located on the company’s property, so any tangible assets that Sara can identify and present to the court, and then court can then issue respective letters requesting the relevant authorities to basically either send money to the court or seize these assets and then ultimately, let’s say if it’s a property or a car, it would have to be auctioned off. With the proceeds from these auctions then the court would ultimately settle the amount of the judgment. Now, as all of this is going on, and it can take some time, but the added benefit of the legal system here is that the amount of the judgment will continue to incur interest. Let’s say if the judgment was for $100,000 dirhams, with a typical interest rate in the U.A.E. courts is about 9% to 12%, so even if enforcement takes time and let’s say another year, there is a possibility of getting 10% to 12% on top of your court judgment as part of the interest. Don’t be disillusioned just by time. But that’s only as long as the defendant, in this case the company, actually had any assets that could be liquidated and could be then used to settle the judgment.
As a general comment, I think it’s important to highlight that before parties start these kinds of cases, they understand and they do the due diligence to see whether the defendant has any assets because often what happens is the parties file the case because they obviously feel aggrieved and rightfully so, and they spend money on lawyers, on court fees, and they spend the time fighting the battle. Then they win, but if at the end of the day there are no assets to satisfy the judgment then basically the employee is at square one. The recommendation is that anytime you decide to file a formal action that you first do sufficient due diligence and have the comfort that in fact once you do have a judgment there is a way for you to settle this judgment with the assets from the company. That is basically one part of the question.
By the way there is nothing else that Sara can do other than just be patient, but that’s as long as there are assets. If there are no assets, then Sara just manage your expectations. Perhaps this is the time to walk away. There is another aspect. Sometimes we often see employees or clients that ask, we know who owns the company, can we go after the owners of the company? It depends on the legal structure of the company but in most cases if the company was a limited liability company, which most of the companies here are, then that liability of the company is limited to the share capital of the company and that means, in most cases, the shared capital does not satisfy the amount of the judgment, so therefore, just to manage expectations. In most of the cases it’s not possible to go after the owners of the company or even the manages of the company in such circumstances.
The last part of it is the visa. It sounds like Sara has remained in the country while the case was pending and the visa somehow was cancelled because obviously it must have expired. Because Sara did not leave the country and remained in the country on the expired visa, there were obviously immigration penalties that were being accrued as a result of this. Sara’s second part of the question relates to what she can do about it and whether there are ways for her to either reduce or waive these extra penalties. In short, yes, there is a way to do it. In general terms, yes, Immigration will continue to show that the penalties are being accrued, and this is because as long as they are waiting for the judgment or the court case to finalize and as long as there is a formal court case, there is a way to request Immigration to waive any accrued penalties. In this case, you just have to present the final court judgment to Immigration and show that you remained in this country and could not leave obviously because of this court process. There is a process to appeal and in most cases, and we have seen many of these cases, the authorities will waive the penalties. But you need to just be prepared that sometimes it may take a few visits and a few documents or identified the list of documents that the authorities need before you can finally waive the penalties.
Zaid: Hello again. This marks the end of this latest episode of Lawgical with LYLAW. Thank you for tuning in. We hope you liked the new format. If you have any feedback or suggestions on how you would like the show to progress or if you have any questions that you would like us to address, please let us know via any of our social media platforms. Stay tuned for upcoming episodes. We have some exciting things planned, and we hope that you enjoy the show as much as we enjoy making it. See you soon.