Abu Dhabi hospital worker of 23 years must pay back one month basic salary on departure

Keren Bobker advises an employee who plans to join another hospital but is unsure of the terms and conditions of departure.

I have worked in a private hospital for the last 23 years. I have a limited contract which says “should either party desire to terminate the renewed contract, such party shall notify other party within one month prior to date of termination. Such period shall be similar to both parties. Both parties have agreed that the termination wage to be paid by terminating party to other party shall be equivalent to the value of worker’s total wage in one month. Such wage shall be similar to both parties”. I am planning to terminate my contract, which was last renewed in December 2015 and join another hospital. Will I have to pay them three months’ salary even though the contract states one month? Can my employer put a one-year ban on me? AS, Abu Dhabi

According to the UAE Labour Law, Article 116 states: “if the contract has been terminated on part of the employee ... the employee becomes liable for compensating the employer against losses incurred by him in consequence of contract termination, provided that the amount of compensation, may not exceed half a month’s pay for a period of three months or for the remaining period of contract whichever is shorter, unless the terms of the contract provide otherwise”. In this case, the terms in the contract, agreed by both parties are different and providing such terms do not disadvantage the employee, they will supersede the standard terms. This will mean that instead of a monetary penalty equivalent to roughly 45 days’ pay, the penalty would be equivalent to one month’s basic salary only. Under new rules that came in to effect on January 1, few people, unless in lower skilled jobs, now receive an employment ban. Even though it is possible for an employer to request a ban, I think it’s unlikely the authorities would accept this after 23 years of service.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai.

Contact her at [e-mail]. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only