‘Can we enrol in the DIFC's savings plan if we don't have a monthly salary?’

We just moved our business to the Dubai International Financial Centre. We are confused about how to implement the DIFC Employee Workplace Savings scheme as the two of us who own and run the business don’t take a salary but pay ourselves quarterly, based on company profits. How do we set up Dews to keep us legal? MG, Dubai

Dews came into effect for DIFC companies in February 2020 to replace the standard end-of-service gratuity that previously applied in line with the UAE Labour Law. It is an end-of-service benefit plan where mandatory contributions from the employer go into a managed saving plan.

Contributions are based on the employee’s salary and employers need to contribute at least 5.83 per cent of basic salary per month for all employees with fewer than five years of service and 8.33 per cent for employees with longer service.

If MG is a partner in the company and does not take a basic salary, he does not have to be enrolled in Dews. But if he takes a set monthly salary, he will need to be enrolled in the scheme. The minimum contribution is based on this basic salary. Any employee, including partners, may also make voluntary contributions.

MG should also be aware that a new company needs to enrol in the Dews scheme as soon as it has eligible employees.

I have been in my job for nearly six months and am still on probation. I have tendered my resignation, which has been accepted, and I finish next week by mutual agreement.

Am I entitled to any extra money in addition to my salary when I leave? I don’t think I will receive a gratuity because I am on probation, but what about annual leave?

My contract states 25 days of annual leave each year. I haven’t had any days off apart from weekends and public holidays. Should I be paid for any days? JC, Abu Dhabi

JC is correct in saying that she is not entitled to any end-of-service gratuity as this is only payable after a full year of service.

Annual leave starts accruing from the date employment starts but there is no entitlement to take annual leave during this time by law, although employers can implement rules that are more beneficial should they wish.

While someone in a probationary period has statutory rights, if they choose to leave with less than six months of service, they can forfeit any days of leave that have accrued and no additional payment is due to JC.

Does an employer have to notify a bank when they are transferring an end-of-service salary? My job was terminated in May and I am working out a three-month notice period, which was in my contract.

It looks like I may have found another job but am worried about my bank account being frozen if I face any delays in starting a new position.

I have an outstanding loan of Dh55,000 with my bank. Is there anything I can do to stop my account being frozen? DR, Al Ain

It is standard practice for an employer to mark the last payment they make to an employee as “final settlement” and it is a requirement to do so. This is a red flag for a bank to check if there are any outstanding liabilities, such as a personal or vehicle loan or credit card debts.

This is done as many people have left the country without settling their liabilities. Freezing a bank account reduces the risk of that happening and also reduces debt problems that banks have to deal with.

How quickly a bank unfreezes an account depends on the situation. If the outstanding debt is small, some banks will unfreeze an account on being shown proof of a new job offer or a new employment visa. In a few cases, a bank will not unfreeze an account until the first salary payment is made. If the individual has a savings account or other assets with a bank, the account may not be frozen.

There are also cases in which a bank will use an end-of-service gratuity to reduce outstanding debts but this should be stated in the signed loan agreement, so DR should check the terms.

If someone expects their account to be frozen, it is wise to withdraw cash to tide them over for a few weeks. Having a good relationship with your bank and advising them of your circumstances will be helpful. Providing copies of new job offers will also help banks understand that the customer intends to continue their loan repayments.

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