UAE employee liable to pay employer a penalty if fixed contract is not finished

I work as a registered nurse under a two-year limited contract and have been with the company for six months. I understand if I leave early I am subject to a penalty of up to 45 days' pay, but on top of that will I receive a six month labour ban? Also, under the other terms and conditions of my contract it was stated that if an employee resigns from the job before the completion of the job, she/he needs to meet the recruitment expenses of the company. All other terms and conditions of employment will be as per those stipulated within the UAE Labour Law. Does that mean I must pay the recruitment process of the company, the penalty of up to 45 days pay and then still get a six month ban? LG, Abu Dhabi

If someone on a fixed contract wants to leave employment before the end of the term then they are liable to pay a penalty to the employer for breaking the contract terms. Article 116 of UAE Labour Law states “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 addition, anyone who leaves a company with less than a year of service is likely to get an employment ban of six months. The condition about an employee repaying visa cost is illegal and not enforceable and it is wrong for the employer to try to make this a part of an employment contract. If the employer insists, a case should be registered with the Ministry of Labour.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with more than 20 years of 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. Readers are encouraged to seek appropriate independent legal advice.

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