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Dubai Court ruling re gratuity payments

Dubai Court ruling re gratuity payments

Old Jun 27th 2011, 8:22 am
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Default Dubai Court ruling re gratuity payments

A worker's end of service benefit should be calculated with respect to his total salary and not just the basic payment, according to a new ruling by the Dubai Court of Cassation.

The decision comes in a case where an employee sought dues of up to Dh159,000 from his employer, which was rejected by the Court of First Instance and later overturned another court.

Accusing the company of his arbitrary suspension, the employee in his lawsuit demands three months' salary as compensation for sacking him without notice, Dh11,000 as salary of the last month he worked, Dh22,000 as leave allowance and ticket to his home country and Dh82,000 as his end of service gratuity.

The plaintiff also claimed in the lawsuit that he worked in the company as a Director of Advertising and Editor of a magazine owned by the company.

However, Court of First Instance in its judgment rejected his lawsuit and ordered the employer to pay a total amount of Dh54,000 to the employee.

The employee appealed against the verdict to the Court of Appeal which ordered the employer to pay the value of a return ticket to the complainant's home country in addition to the amount ordered by the earlier court.

The prosecution also appealed against the ruling on the basis that the end of service benefit of the employee was calculated only on according to the basic salary of worker, which it said was against the labour law.

The Court of Cassation accepted the appeal and directed the case to the Court of Appeal asking for a new panel judges to look into the case.

The Court of Cassation observed: "The pay in accordance with the provisions of Article I of the Labor Law includes all that a worker receives as emolument, whether in cash or in kind, hence the gratuity should be calculated according to the entire amount received by a worker, including his monthly commission."



Source: http://www.zawya.com/story.cfm/sidZA...emailmarketing
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Old Jun 27th 2011, 8:33 am
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Default Re: Dubai Court ruling re gratuity payments

However, seeing as legal precedent doesn't apply here, there's no certainty that the next similar case will have a similar result. Nevertheless, this finding could be adduced in evidence for persuasive purposes. It may be relevant to note that the case is in relation to "arbitrary suspension", perhaps further limiting the applicability of the principle in other cases.
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Old Jun 27th 2011, 8:37 am
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Default Re: Dubai Court ruling re gratuity payments

True, but it's an interesting ruling nonetheless.
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Old Jun 27th 2011, 9:08 am
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Default Re: Dubai Court ruling re gratuity payments

Originally Posted by Meow
True, but it's an interesting ruling nonetheless.
Yep, didn't mean to detract from that.
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Old Jun 27th 2011, 10:11 am
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Default Re: Dubai Court ruling re gratuity payments

The case also backs up my previous advice about regular commissions being taken into consideration when calculating gratuities (as does the WPS) and also effectively gives other employees in the same situation the right to take their employer to court.
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Old Jun 27th 2011, 10:22 am
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Default Re: Dubai Court ruling re gratuity payments

Originally Posted by Bahtatboy
However, seeing as legal precedent doesn't apply here, there's no certainty that the next similar case will have a similar result. Nevertheless, this finding could be adduced in evidence for persuasive purposes. It may be relevant to note that the case is in relation to "arbitrary suspension", perhaps further limiting the applicability of the principle in other cases.
It doesn't apply in Scotland either...though it is a feature of English/Welsh common law.
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Old Jun 27th 2011, 11:24 am
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Default Re: Dubai Court ruling re gratuity payments

I think you'll find it does, or were you having a dig at something?
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Old Jun 27th 2011, 11:31 am
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Default Re: Dubai Court ruling re gratuity payments

If you are refering to Scottish legal precidents, then no, a Scotish case cannot be cited in an English court. Two very different legal systems.
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Old Jun 27th 2011, 12:11 pm
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Default Re: Dubai Court ruling re gratuity payments

Originally Posted by Meow
The case also backs up my previous advice about regular commissions being taken into consideration when calculating gratuities (as does the WPS) and also effectively gives other employees in the same situation the right to take their employer to court.
Hi Meow, what's your definition of regular commissions? (I have an annual bonus that is a direct percentage of the net profit of the company). Do you think that this should be factored into any gratuity payment if I am lucky enough to leave?
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Old Jun 27th 2011, 12:37 pm
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Default Re: Dubai Court ruling re gratuity payments

Originally Posted by Brains1983
Hi Meow, what's your definition of regular commissions? (I have an annual bonus that is a direct percentage of the net profit of the company). Do you think that this should be factored into any gratuity payment if I am lucky enough to leave?

According to the conversations I have had with the Ministry of Labour they take it to mean something that is payable regularly and forms part of your contract of employment. The payment should be a regular feature such as monthly or quarterly commission payments. I don't believe that annual bonuses are generally included.
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Old Jun 27th 2011, 2:49 pm
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Default Re: Dubai Court ruling re gratuity payments

That's good news- can only make a case in Abu Dhabi stronger, right?
I'm in a situation where pay structure is jiggery-pokeried in order to minimise exposure to tax.

It also means my basic is less than my housemaid's though...
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Old Jun 27th 2011, 2:53 pm
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Default Re: Dubai Court ruling re gratuity payments

Originally Posted by seven seas
That's good news- can only make a case in Abu Dhabi stronger, right?
I'm in a situation where pay structure is jiggery-pokeried in order to minimise exposure to tax.

It also means my basic is less than my housemaid's though...
It certainly won't make it weaker, but I don't know if you can adduce as persuasive evidence in an Abu Dhabi court a decision of a Dubai court. Anyone?
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Old Jun 27th 2011, 4:12 pm
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Default Re: Dubai Court ruling re gratuity payments

Originally Posted by Bahtatboy
It certainly won't make it weaker, but I don't know if you can adduce as persuasive evidence in an Abu Dhabi court a decision of a Dubai court. Anyone?
of course you can, it is the United Arab Emirates after all
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Old Jun 28th 2011, 7:15 am
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Default Re: Dubai Court ruling re gratuity payments

Originally Posted by Sandboy
of course you can, it is the United Arab Emirates after all
In the same way that Scotland is in the United Kingdom
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Old Jun 28th 2011, 12:33 pm
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Default Re: Dubai Court ruling re gratuity payments

Forwarded to our HR - will see what happens... probably nothing.
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