I am a waiter in a five-star hotel in Dubai. I have been working there for 10 months. Now I have been offered a new job and want to leave the hotel that I’m working for, but according to the contract I have a two-month notice period. I want to ask if I can leave the hotel without notice as I am ready to pay them to do this. And what do I have to pay? Two months’ salary plus hiring fee and other fees? Or can they reject my resignation notice and force me to finish the two months of notice? And can they ban me from working elsewhere? DV, Sharjah

DV has not confirmed the nature of his contract, so it will be assumed that it is unlimited. While UAE Labour Law refers to a minimum notice period of one month, if the contract of employment states that the notice period is two months and this is signed by both the employee and the employer, then that is enforceable and DV can be made to work the full notice period as agreed. An employer can agree to allow someone to leave employment sooner, although they are not obliged to, but they cannot enforce a penalty for someone on an unlimited contract. Employers are also not permitted to reclaim the cost of hiring an employee when they leave, nor can they refuse to accept a letter of resignation. The rules regarding employment bans changed in January of this year. Provided someone has completed six months of service and completed the agreed notice period, they will not receive a ban and will be free to take up another position.

Keren Bobker is an independent financial adviser 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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I want to buy a house in Dubai and read that I can borrow 75 per cent of the purchase price, but my bank says it will only lend me 60 per cent of what I will pay, even though I have plenty of income. Do the banks not have to comply with the legal limits in this country? RH, Dubai

The Central Bank of the UAE made changes to the mortgage lending limits in 2013 so that for expats, the maximum loan to value for the first property purchased will be limited to 75 per cent of the purchase price up to a valuation of Dh5 million. For a purchase price above this level, the maximum loan to value will be 60 per cent. For all second properties the maximum loan will be limited to 60 per cent, regardless of value. I understand that RH is looking to buy a villa with a purchase price of Dh5.2m so will be limited to borrowing 60 per cent of the price paid. I suggest speaking to a specialist mortgage broker to look at all the mortgage options, as the rates vary between lenders.

Keren Bobker is an independent financial adviser 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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I want to buy a house in Dubai and read that I can borrow 75 per cent of the purchase price, but my bank says it will only lend me 60 per cent of what I will pay, even though I have plenty of income. Do the banks not have to comply with the legal limits in this country? RH, Dubai

The Central Bank of the UAE made changes to the mortgage lending limits in 2013 so that for expats, the maximum loan to value for the first property purchased will be limited to 75 per cent of the purchase price up to a valuation of Dh5 million. For a purchase price above this level, the maximum loan to value will be 60 per cent. For all second properties the maximum loan will be limited to 60 per cent, regardless of value. I understand that RH is looking to buy a villa with a purchase price of Dh5.2m so will be limited to borrowing 60 per cent of the price paid. I suggest speaking to a specialist mortgage broker to look at all the mortgage options, as the rates vary between lenders.

Keren Bobker is an independent financial adviser 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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I started my job with a private oilfield company based in Abu Dhabi in 2011. I work as an operational manager on a rotational basis and work mainly out of the UAE. My visa is due for renewal in early 2017 and the company has already sent me a letter to sign and return. This letter states that I am not a UAE employee and the given visa is only for travel purposes. It also states that I am not entitled to any type of employee benefit from a UAE company. I don’t have any other employment contract and this company is my sole employer. So far every month my salary is paid from an Abu Dhabi bank and the contract is also from the UAE and mentions that UAE Labour Law applies. I haven’t received a salary increase or any change in terms before. I don’t want to sign the letter sent by HR and so the company is asking for my resignation and telling me that no end of service gratuity will be provided. Please advise me about my rights and how to get my benefits. HB, Abu Dhabi

If an individual has a contract of employment with a UAE-based company, has a UAE residency visa linked to their employment and is paid a salary from a UAE bank account, there is no question they are legally employed in the UAE. This is underlined by the fact that HB’s existing terms of employment are on this basis and there is no intention to change his role. HB is fully entitled to receive his end of service gratuity in full, without any reduction for resigning because he has more than five years of service, and the employer cannot legally withhold this.

The current contract is on an unlimited basis so it appears that the employer is attempting to make changes to the contract terms. Employers are not permitted to arbitrarily change contract terms without the employee’s agreement and the terms that are being proposed are in breach of UAE Labour Law. If an employee feels that they are being forced out of a company without good reason, they may have a case for arbitrary dismissal. This is covered in Article 122 which states: “termination by the employer of an employee’s service is considered arbitrary if the cause for such termination has nothing to do with the work. In particular, termination is considered arbitrary if the employee’s service has been terminated on grounds, or a reasonable complaint lodged by him to the competent authorities, or on grounds of a justifiable action brought by him against the employer.” HB has the right to make a complaint to the Ministry of Labour based on several actions by his employer and if it is agreed that he is being dismissed arbitrarily he could receive compensation of up to three months’ salary.

Keren Bobker is an independent financial adviser 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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If an employee has a one-year limited contract but continues to work under the same conditions beyond its expiry, is the contract thereafter considered unlimited? I am particularity concerned with conditions for termination of employment. It seems early termination of limited contracts may incur penalties not incurred by unlimited contracts when providing 30 days’ notice. JM, Dubai

It is unusual to see a one-year limited contract as most are linked to the duration of the residency visa, so are mainly for two or three years, depending on the location of the employer. At the end of the initial period of the contract, it can be renewed for a further fixed period or at the agreement of both the employee and employer. If a new fixed-term contract is not provided to the employee, it is generally considered that employment will continue on unlimited terms but the employee would be wise to clarify in each case. This will be deemed continuous service.

Any employee who breaks the terms of a limited contract will be liable for a penalty that is separate to the standard notice period. Article 116 of UAE Labour Law states: “if the contract has been terminated on part of the employee … the employee becomes liable for compensating the employer against losses incurred by him in consequence of contract termination, provided that the amount of compensation, may not exceed half a month’s pay for a period of three months or for the remaining period of contract whichever is shorter, unless the terms of the contract provide otherwise.” In addition the end of service gratuity is not payable to anyone on a fixed contract who resigns with fewer than five years of continuous service, per Article 138 of the law.

Keren Bobker is an independent financial adviser 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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I have given one month’s written notice to my employer and they verbally confirmed to waive the remaining 20 days or so of my notice. I have received another offer and I need to join immediately after I finish my notice period here. Should I simply stop going to work or should I first get written approval about the waiver and ask them to process my cancellation? Assuming they did not give it to me in writing and I completed the 30 days of notice, am I still bound to work more to avoid any absconding charges? SM, Sharjah

For anyone on a standard unlimited contract, 30 days’ notice is required to end employment, but that can be waived with the agreement of both parties. I would advise SM to get this confirmed in a formal letter from the company. If employment is terminated early, the usual formalities still apply and the company must pay SM any monies that are due in terms of salary, days of annual leave accrued and not taken, and any end of service gratuity that may be payable. The company must also process the cancellation of the employment visa and this should be done before employment is taken up with another company. If the notice period is reduced with the employer’s agreement, there would not be an absconding issue and such cases are only registered when an employee leaves service without the approval of the company. If for any reason the employer decides that the full notice period must be worked after all, then SM must turn up for work as normal.

Keren Bobker is an independent financial adviser 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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I work as a teacher in a private school based in Abu Dhabi. I have completed my first contract of two years and am part-way through my second contract. Recently I received another job offer with a higher salary and better facilities compared to my present organisation. If I resign in the middle of my second contract, what terms and conditions apply to me? Will I get all my benefits? Or do I have to face any consequences? AK, Abu Dhabi

Anyone who resigns part-way through a fixed-term contract is breaking the terms of the agreement and will be penalised for doing so. Article 116 of UAE Labour Law states: “If the contract has been terminated on part of the employee … the employee becomes liable for compensating the employer against losses incurred by him in consequence of contract termination, provided that the amount of compensation, may not exceed half a month’s pay for a period of three months or for the remaining period of contract whichever is shorter, unless the terms of the contract provide otherwise.” If accommodation is provided, it must be vacated within 30 days of the end of service, per Article 131.

In line with Article of 138 of the law, no gratuity will be payable in this situation. The law states: “If an employee under a contract with limited period leaves his work at his own option before the end of the contract period, he shall not be entitled to end of service gratuity unless the period of his continuous service exceeds five years.” Finally, under the current rules AK should not receive an employment ban if there is mutual consent to leave, proper notice is given, and he has qualifications higher than a high school certificate.

Keren Bobker is an independent financial adviser 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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I am a sales manager of a company that produces and sells a product to a specific type of business. I have had a job offer from a company that is our main competitor in certain product lines, although the offer is to work on a different product and I would not be working in exactly the same field. My contract has a non-competition clause. Is there any risk in accepting this new offer? Should I disclose the name of new company to my current employer or would it affect my end-of-service payment? BV, Dubai

Labour law permits non-competition clauses to be included in a contract of employment as a way of protecting a business, and while they are legitimate, such post-termination restrictions can be difficult to enforce. Article 127 of UAE Labour Law specifically states that where an employee performs a role which allows him to become familiar with confidential information, the employer may put in place an agreement with provisions that prevent an employee from working with a competing business. But there are limitations. Any non-compete clauses must be reasonable and must only limit conduct in a way that is necessary to protect legitimate business and legal interests. The clauses must be limited in duration, geographical scope and the nature of the restriction. Restrictions of more than six months are unlikely to be upheld and the employer would have to prove that they have been disadvantaged in some way. I have seen the clause in BV’s contract and this refers to a non-competition period of 12 months, which is excessive. Any penalty can only be enforced by way of a court ruling and the employer would have to bear the cost of making a legal claim. If BV changes job and would be working with different products, the current employer’s claim would be weakened. An employee is not obliged to disclose the name of a new employer and provided they give the appropriate period of notice, the end-of-service gratuity entitlement is pay­able in accordance with UAE Labour Law, albeit reduced if the current period of service is less than five full years.

Keren Bobker is an independent financial adviser 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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I work in the HR department of a Dubai company and one of our employees resigned from employment during the middle of his second limited contract. What benefits do we have to give him as settlement? RM, Dubai

If an employee resigns part way through a limited contract, they are deemed to have broken the terms of the agreement and will be penalised. Article 116 of UAE Labour Law states: “If the contract has been terminated on part of the employee … the employee becomes liable for compensating the employer against losses incurred by him in consequence of contract termination, provided that the amount of compensation may not exceed half a month’s pay for a period of three months or for the remaining period of the contract whichever is shorter, unless the terms of the contract provide otherwise”. If any accrued days of annual leave have not been taken, the employee should be paid for these days but in accordance with Article 138: “If an employee under a contract with limited period leaves his work at his own option before the end of the contract period he shall not be entitled to end of service gratuity unless the period of his continuous service exceeds five years”. If the individual is returning to a home country, Article 131 applies and this states: “If the cause for termination of contract is attributed to the employee, his repatriation will be arranged at his own expense if he has the mean to pay”.

Keren Bobker is an independent financial adviser 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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I have a debt with a UAE bank and have defaulted on the payments. The amount owed is Dh200,000. I left the UAE in February 2015 to return to Pakistan. Now I want to travel to Malaysia. My question is whether Paki­stani immigration can stop me from leaving because of my unpaid debts in the UAE. My reason for going to Malaysia is for work. Once I have money again, I will start paying back what I owe. MSI, Pakistan

A debt in the UAE is usually only an issue in this country. However, if repayments are not made a bank has the right to register a police case against the individual, which could lead to arrest on entering the UAE or if attempting to leave if the person is already here. It is unlikely that a person would have any issues leaving Paki­stan or entering Malaysia owing to a UAE debt, although there have been ­cases where a debt collection agency has been engaged to recover the debt and they have tracked people down in other countries. However, there is a question mark over jurisdiction and whether any UAE debt case is enforceable in any other country.

The lawyers I have spoken to say it is not. If MSI is still worried, he should contact the bank he owes the money to and ask what action, if any, it has taken. It is likely to be more helpful if he lets the bank know that he intends to start repaying the money that he owes.

Keren Bobker is an independent financial adviser 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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