Labour Law states no clear rules for redundancy pay



I have been working as a project engineer in a free zone company in Ras Al Khaimah. Just a few days ago, my HR manager told me the company is cutting costs, which will result in the termination of some employees, including me. I have a RAK free trade zone visa, which is valid for another full year. What is the notice period? And do I get three months' pay? ST, RAK

Under the UAE Labour Law, all employees must be given the appropriate amount of notice once they are permanently employed and out of their probationary period. This is a minimum of 30 days per Article 117, but can be longer if stated in the contract of employment provided at outset and agreed by both parties. There is no provision for redundancy pay in the Labour Law, although some employers choose to make an additional payment, this is not common. There is a clause, Article 122, in respect to arbitrary dismissal, which can allow for an additional payment to be made but this is not likely to be upheld if a company is making a significant number of employees redundant. One other reason a person can be entitled to an additional payment is if they are on a limited contract. Article 115 states: “should the employment contract be of a determined term … he shall be bound to compensate the worker for the damage incurred thereto, provided that the compensation amount does not exceed in any case the total wage due for the period of three months or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract”. Upon termination of employment, the residency visa is also cancelled, so the validity becomes irrelevant.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 20 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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TEACHERS' PAY - WHAT YOU NEED TO KNOW

Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:

- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools

- average salary across curriculums and skill levels is about Dh10,000, recruiters say

- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance

- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs

- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills

- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month

- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues