‘Is it mandatory for all employees to serve a notice period after they resign?’

If one of our employees resigns immediately, could we ask him not to serve the notice period? Who has the right to enforce a notice period in the event of a resignation?

Is it the employer or the employee? Our company is in mainland Dubai and the unlimited contract mentions a two-month notice period. SG, Dubai

When an employee decides to leave a company, they must give notice in accordance with the agreed terms of the employment contract. In this case, the employee should continue to be employed for two months but they don't need to come to work if the employer does not want them to. This is not uncommon in sales roles, for example.

If an employer does not want someone who has resigned to be at work, they can put them on what is known as “garden leave”, whereby the person stays at home for the notice period and remains an employee with full pay and benefits. At the end of the notice period, the visa can be cancelled and benefits paid out.

Alternatively, the company can end a worker's service sooner but this can only be done with the employee’s consent and payment for the two-month notice period. In addition, commensurate pay and benefits must be made in full.

An employee may agree to this if they have a new job but they cannot be forced to end their service sooner.

My company said it plans to reduce my salary. If I do not accept the reduction, what can they do? Can they terminate me and will they pay my gratuity? I have been working for the company for more than six years. EW, Abu Dhabi

It is understood that EW works for a mainland company. No private employer in the UAE is permitted to reduce the salary of an employee without their agreement.

It has always been the case that both parties must agree to any changes to contract terms, but this was clarified in Ministerial Resolution No (279) of 2020, which came into effect a year ago and is still valid.

If an employer is facing financial issues and wishes to reduce a worker’s salary, they can do so for a specified period, but only “in agreement with the non-citizen employee”, as stated in Article 2 of the resolution.

If the company wishes to temporarily reduce a salary, they must follow the guidance of Article 5, which states: “Companies willing to reduce the wages of a non-citizen employee temporarily during the period referred to are obligated to do the following: 1. Conclude a “temporary additional appendix” to the labour contract between the two parties, according to the form attached with this resolution, provided that it expires with the expiration of the term of the contract or the period of validity of this resolution, whichever is earlier ... 2. To prepare the appendix ... in two copies, with each party keeping one of them. The employer shall submit it to the ministry whenever requested to do so.”

If the company wishes to permanently reduce the salary, they still need the employee’s agreement and must then follow guidance in Article 6 of the resolution: “The companies that want to permanently reduce the wages of a non-citizen employee are obligated to apply on the ‘employment contract data modification’ service to obtain the approval of the ministry in accordance with the procedures in force.”

If an employee does not accept the reduction and it is imposed, they should register a case against the employer with the Ministry of Human Resources and Emiratisation.

If an employee is terminated for not accepting a salary reduction, they have a case for arbitrary dismissal under Article 122 of the UAE Labour Law. This states: “The termination of the employment of the worker by the employer shall be deemed arbitrary should the cause of termination not be related to work ...”

Article 123 explains the compensation that may be due. “Should the worker be arbitrarily dismissed, the competent court may order the employer to pay compensation to the worker. The court shall assess such compensation, taking into account the type of work and the extent of damage incurred to the worker, as well as the duration of employment and after the investigation of the work conditions. In all cases, the amount of compensation shall not exceed the wage of the worker for a period of three months calculated on the basis of the last due wage.”

The gratuity is also payable in full. The ministry can be contacted through its website or by calling 800 60.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 25 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

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