UAE companies not permitted to arbitrarily change any worker’s terms of contract

I started my job with a private oilfield company based in Abu Dhabi in 2011. I work as an operational manager on a rotational basis and work mainly out of the UAE. My visa is due for renewal in early 2017 and the company has already sent me a letter to sign and return. This letter states that I am not a UAE employee and the given visa is only for travel purposes. It also states that I am not entitled to any type of employee benefit from a UAE company. I don't have any other employment contract and this company is my sole employer. So far every month my salary is paid from an Abu Dhabi bank and the contract is also from the UAE and mentions that UAE Labour Law applies. I haven't received a salary increase or any change in terms before. I don't want to sign the letter sent by HR and so the company is asking for my resignation and telling me that no end of service gratuity will be provided. Please advise me about my rights and how to get my benefits. HB, Abu Dhabi

If an individual has a contract of employment with a UAE-based company, has a UAE residency visa linked to their employment and is paid a salary from a UAE bank account, there is no question they are legally employed in the UAE. This is underlined by the fact that HB’s existing terms of employment are on this basis and there is no intention to change his role. HB is fully entitled to receive his end of service gratuity in full, without any reduction for resigning because he has more than five years of service, and the employer cannot legally withhold this.

The current contract is on an unlimited basis so it appears that the employer is attempting to make changes to the contract terms. Employers are not permitted to arbitrarily change contract terms without the employee’s agreement and the terms that are being proposed are in breach of UAE Labour Law. If an employee feels that they are being forced out of a company without good reason, they may have a case for arbitrary dismissal. This is covered in Article 122 which states: “termination by the employer of an employee’s service is considered arbitrary if the cause for such termination has nothing to do with the work. In particular, termination is considered arbitrary if the employee’s service has been terminated on grounds, or a reasonable complaint lodged by him to the competent authorities, or on grounds of a justifiable action brought by him against the employer.” HB has the right to make a complaint to the Ministry of Labour based on several actions by his employer and if it is agreed that he is being dismissed arbitrarily he could receive compensation of up to three months’ salary.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. 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.

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