Can arbitrarily terminated employees get more the 3 month-salary in compensation?

Legal Article is orignally from Gulf News, where it is answered by Senior Advocate Mohammad Ebrahim Hassan Al Shaiba.

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Two months ago, a Dubai-based company where I was working terminated my service for no reason. My labour contract is for unlimited period and my total service has been more than 15 years. Currently, the company is not allowing me to work in a notice period. My questions are: Since my service has been more than fifteen years and as my family and I have suffered a lot of damages due to the termination, can I claim in the labour court, along with my end of service, more than three-month salary for arbitrary dismissal? Can I claim for a notice period which is in my contract is mentioned as three months? Do I calculate the arbitrary dismissal as per the basic salary or full salary?

I would like to clarify that as per the Article 123 UAE Labour Law No 8 of 1980, which mentioned the following: “a. Where a worker is arbitrarily dismissed, the competent court may order the employer to pay him compensation. The court shall assess such compensation with due regard to the nature of the work, the amount of prejudice he has sustained and his period of service, and after investigating the circumstances of the work. The amount of the compensation shall in no case exceed the worker’s remuneration for three months calculated based on the last remuneration he was entitled to.

b. The provisions of the preceding paragraph shall not prejudice the worker’s right to the gratuity he is entitled to and the termination notice allowance provided for in this law.”

Therefore, as per the above mentioned article, the maximum claim by the employee due to the arbitrary dismissal is three months’ salary only and to be paid to the employee on the basis of full salary. The questioner also has the right to claim for three months full salary for the notice period.

Commission

I work in a real estate company as a sales agent in Ajman and my salary is on a commission basis only for the last five years. My question is: How will my end of service gratuity be calculated if I decide to resign? Will it depend on my commission?

To answer this question I would mention that the UAE Labour law states that for the purpose of calculating the benefit, whatever is given to the employee in kind would not be included, such as transport, housing, overtime, children’s education and other allowances. It is only basic salary that is used to calculate the gratuity. However, in the past few years there have been a number of cases where the UAE courts have awarded their gratuity based on basic salary and certain commissions. Additionally, a bonus could potentially be included if it operates in the same way as those certain commissions and the employee has a track record of achieving targets. When there is a change in contract, the salary before any change has no bearing.

If you have enough supporting documents to prove that the commission you have been taking for the past five years is considered salary, you have a case and can claim for it in the labour court.

Thus your end of service gratuity can be calculated according to that commission as average of the last six months during the work period or within a reasonable period and your dues must be calculated on the basis of which the commission shall be counted from the date of completion of the work.

Questions answered by advocate Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants.