Continuity of UAE employment not affected with transfer in sponsorship

My wife was working under my sponsorship for two years on a limited contract, and after completing the tenure she asked the company to sponsor her directly. The company then issued an unlimited contract and a temporary work permit while they sorted out the sponsorship. For three months my wife was still working and her salary was duly transferred to her bank, but when the company issued a new contract they put in a probationary clause. They then fired her under the new contract probationary clause and gave a performance-related reason. She actually served the company continuously for two years and six months. As per article 37 no employer can hire an employee for more than six months on probation and more than once, but this law does not explain our situation. The company treated her as a new employee after signing a new labour agreement with a new probation period of six months, and they claim that this transfer of sponsorship means she was a new employee. Also, the company has issued the end of service gratuity for the first two years of limited contract, but the gratuity calculation was also wrong. They got her to sign the paperwork and transferred the agreed money. PL, Sharjah

If someone transfers from being sponsored by a spouse to being sponsored directly by the employer, this does not affect the continuity of employment. In this case the employer was wrong to put Mrs L on probation, and this is not permitted by law. Furthermore, an employer is not permitted to change the terms of a contract without the employee’s permission and it is quite usual for someone to move from a fixed-term contract to an unlimited one at the end of the set period and for all other conditions to continue to apply. Considering the length of service, Mrs L is entitled to receive the full gratuity based on her basic salary for the full period of her employment. Ideally she should not have signed any paperwork to accept a lower sum, but can still contest this as she has the right to raise a case with the Ministry of Labour. It appears the gratuity amount was reduced to take into consideration visa costs, but they are the responsibility of the employer and must not be passed on. It appears Mrs L has grounds for arbitrary dismissal and could receive compensation of up to three months’ salary if she wins.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with more than 20 years of 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. Readers are encouraged to seek appropriate independent legal advice.

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