Employer recoups if fixed contract is not seen through

Recently I resigned from a company where I worked for over 10 months. They are now trying to make me pay for my visa because in the letter of appointment there is a line where they say I must pay for it if I resign before the end of three years. From reading previous columns I have seen you say that the UAE labour law states that the employer must bear the cost of the visa and labour card, not the employee. They didn't pay for my medical examination which cost me Dh340 and I didn't have medical insurance because they wanted me to pay for it too. At the moment, I haven't signed resignation papers because they are trying to lower my last month salary to Dh4,000 and make me pay them other money for leaving the job early. R E Dubai

R E is on a fixed contract, hence the reference to three years, so if he leaves before the end of the specified term he will have to compensate the employer. Article 116 of UAE Labour Law 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”. It is not acceptable to ask an employee to repay their visa expenses (per Ministerial order 52 of 1989, Article 6) and the company should have paid for RE’s visa-related medical examination, so the cost of this should be deducted from any monies owed. It is not yet a legal requirement for Dubai employers to provide medical insurance although that situation is changing. An employer cannot reduce an employee’s salary without the employee’s agreement. Furthermore, Article 131 states that “Expenses for repatriation of an employee to his place of origin or any other place agreed upon by both parties shall be borne by the employer”. In this case the employer is a free zone, but standard UAE Labour Law provisions still apply.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at [e-mail]

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