I have been working for a construction company since 2009. My two-year employment contract finishes in another year, but I want to resign and go home. Will my company reduce my gratuity? BA, Dubai
An end-of-service gratuity can be reduced for two main reasons. If someone is on an unlimited contract and they resign with less than five years of service, the amount payable will be lower. Also, if an employee has a fixed-term contract of employment and resigns with fewer than five years of service, the gratuity is forfeited as per Article 138 of the UAE Labour Law, which states: “Should the worker bound by an employment contract with determined term leave his work by his own choice prior to the expiry of the contract, he shall not be entitled to an end-of-service gratuity unless the duration of the service period exceeds five years.”
BA states that he has been with the same employer since 2009, so he is entitled to receive the gratuity payment in full. This will be calculated as per Article 132: “The wage of 21 days for each of the first five years of service … and the wage of 30 days for every additional year.” This is calculated on the basic salary only.
In addition, BA needs to be aware that if he resigns part way through a fixed-term contract, even after more than 10 years of service, the employer can apply a penalty for breaking the contract terms. According to Article 116: “Should the contract be rescinded by the worker … the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract, provided that the amount of compensation does not exceed the wage of half a month for the period of three months, or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.”
My company pays only 80 per cent of an employee's salary when they go on leave. Also, for our annual flight ticket, we are paid 80 per cent if we opt for cash. Our company has a five-day working week, with Friday and Saturday being the weekend. When an employee goes on leave on either Thursday or Sunday, their leave deduction includes the weekend. Is this right? And what is the policy for payment for leave encashment if a company did not allow an employee to use all their annual leave? MJ, Abu Dhabi
Salaries should be paid in full during leave periods, especially the basic salary and housing allowance. In some cases, travel allowances are not payable, but this should be clarified in the contract of employment.
If a contract states that an annual ticket is payable, a cash alternative is only an entitlement if the contract or company handbook states this, or the employer agrees
For a flight ticket, it depends on employment terms whether it can be paid as cash or not. If a contract states that an annual ticket is payable, a cash alternative is only an entitlement if the contract or company handbook states this, or the employer agrees. If documentation states that payment in lieu of the annual flight ticket is at a rate of 80 per cent, the reduced payment would be correct. If, however, the contract simply states that a cash payment is available, it should be for the full cost of a flight.
Annual leave is often calculated on a “calendar basis”, so if the period of leave includes a weekend, those days are also counted. If a contract refers to “working days” rather than “calendar days”, Fridays and Saturdays should not be counted. This should also be clarified in a contract of employment or company handbook.
By law, all employees are entitled to annual leave and while an employer can specify when this is taken, they should not prevent anyone from taking the leave they are entitled to.
This is stated in Article 78 of the UAE Labour Law: "Should work circumstances require that the worker work during his total annual leave or a part thereof, and should the leave during which the worker worked is not carried forward to the next year, the employer must pay the worker the wage thereof, in addition to a leave allowance for the days of work, equal to his basic wage."
If an employer refuses to permit an employee to take their leave, then they have grounds to register a complaint with the Ministry of Human Resources and Emiratisation, and the same applies if salaries are being unfairly reduced. The helpline number is 800 60 and there is an online chat function on the website www.mohre.gov.ae.
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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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
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Getting there
Flydubai flies direct from Dubai to Tbilisi from Dh1,025 return including taxes
How much do leading UAE’s UK curriculum schools charge for Year 6?
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- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
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THE SPECS
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
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The specs
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Jetour T1 specs
Engine: 2-litre turbocharged
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
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Engine: 1.5-litre turbo
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- Technology expert in robotics and automation: Dh20,000 to Dh40,000
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- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
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- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
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