When an employee decides to leave a company, they must give notice in accordance with the agreed terms of the employment contract. Getty
When an employee decides to leave a company, they must give notice in accordance with the agreed terms of the employment contract. Getty
When an employee decides to leave a company, they must give notice in accordance with the agreed terms of the employment contract. Getty
When an employee decides to leave a company, they must give notice in accordance with the agreed terms of the employment contract. Getty

'Do I have to pay my employer for resigning during probation?'


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I started with my company on April 7 this year but have received an offer for another job in the UAE. I have a six-month probation period and have submitted my resignation with one month's notice.

However, the company is telling me that I have to pay compensation. I don’t have money to pay them. Is there a way of changing jobs without paying compensation? DK, Ajman

No employer is permitted to request compensation from a worker should they leave their job at any time.

This has always been the case and is clarified in the UAE's new labour law in Article 6, which covers the recruitment and employment of workers.

It says: “The employer is prohibited from charging the worker for the fees and costs of recruitment and employment or collecting them from him, whether directly or indirectly.”

Should an employee choose to leave during their probation period, they must provide notice, which has been done in this case. There is also clear guidance as to what happens if an employee wishes to move to another employer in the UAE.

Article 9, clause 3, of the labour law states: “If the worker wishes to move, during the probationary period, to work for another employer in the state, he shall notify the original employer of the same in writing within not less than one month from the date of his wish to terminate the contract. Then, the new employer shall compensate the original employer for the costs of recruitment or contracting with the worker, unless otherwise agreed upon.”

However, the situation is different if an employee intends to leave the UAE.

Clause 4 of the labour law says: “If the foreign worker wishes to terminate the employment contract during the probationary period, to leave the state, he shall notify the employer of the same in writing not less than fourteen (14) days from the date specified for the termination of the contract.”

If a foreign worker leaves the UAE but then returns to take up new employment within a period of three months, they are treated as having moved immediately to a new role and the previous employer is liable for the recruitment costs as per clause 3 above.

Either way, the employee pays no compensation to the employer.

I have an offshore bank account and my bank has sent me a form with a number of questions to answer. One of them is asking for my Tax Identification Number (TIN). I don’t pay tax on my income as I have been resident in Dubai for years. I have never been asked this before and have not heard of this either.

What is this number and does it mean I have to pay tax on my bank account in the Channel Islands, in the UK? When I called the bank, the person I spoke to didn’t seem to know. SM, Dubai

In the vast majority of cases, the liability to pay tax on income is based on residency.

SM is British and a UK non-resident for tax purposes, which means that he is not liable to pay UK tax on his UAE earnings or interest from his offshore account.

The request for a TIN is a common request from banks and insurance companies these days. For UAE residents, the response should be “not applicable” as the Emirates does not currently issue TINs to residents.

I have resigned from my job as I plan to return to my home country. I sent my manager an email but the company is saying they are not accepting it and I have to stay until the end of the year. My contract says the notice period is 30 days, so I said I would work for this time. However, they say they can change that.

Can the company force me to stay longer? MV, Abu Dhabi

No employee can be forced to work for a company. One only needs to work out their notice period stated in the contract if they wish to leave. An employer cannot change the notice period.

No employee can be forced to work for a company. One only needs to work out their notice period stated in the contract if they wish to leave
Keren Bobker

This is confirmed by the Ministry of Human Resources and Emiratisation on its website, which states: “An employer cannot reject an employee’s resignation, provided the employee gives due notice and obtains the employer’s signature on his or her resignation letter, or sends the resignation letter by fax, email or postal mail.”

If the employer still refuses to release MV and not pay her gratuity, she can register a complaint against the company on the ministry's website and it will back her up.

MV can also call the ministry on 600 59 0000 or contact it through its app.

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

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The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


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How to get exposure to gold

Although you can buy gold easily on the Dubai markets, the problem with buying physical bars, coins or jewellery is that you then have storage, security and insurance issues.

A far easier option is to invest in a low-cost exchange traded fund (ETF) that invests in the precious metal instead, for example, ETFS Physical Gold (PHAU) and iShares Physical Gold (SGLN) both track physical gold. The VanEck Vectors Gold Miners ETF invests directly in mining companies.

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Brave investors could take on the added risk of buying individual gold mining stocks, many of which have performed wonderfully well lately.

London-listed Centamin is up more than 70 per cent in just three months, although in a sign of its volatility, it is down 5 per cent on two years ago. Trans-Siberian Gold, listed on London's alternative investment market (AIM) for small stocks, has seen its share price almost quadruple from 34p to 124p over the same period, but do not assume this kind of runaway growth can continue for long

However, buying individual equities like these is highly risky, as their share prices can crash just as quickly, which isn't what what you want from a supposedly safe haven.

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Updated: June 23, 2023, 4:34 PM`