15 Jun 2014

AN EMPLOYEE'S PERSPECTIVE: DELAYED OR WITHHELD SALARIES

Authored by: Alex McGeoch

AN EMPLOYEE'S PERSPECTIVE: DELAYED OR WITHHELD SALARIES

Alex McGeoch, Head of Employment at Hadef & Partners in Dubai recently provided commentary for Emirates 24/7 concerning employees who are faced with delayed or withheld salaries. Alex explains the legalities in this situation, the entitlements of an employee and discusses the best ways to go about resolving any issues with an employer.

 

Emirates 24/7
by Shuchita Kapur
published Sunday, June 15, 2014

What To Do When: You do not get your salary on time.
Legal experts explain reasons and ways to resolve issues amicably

Although there may not be many such cases in the country, there are some employees who complain of delayed or withheld salaries.

AA, an employee with a private shipping agency, claimed that he and his colleagues were not paid for two months and when they objected to this, the company officials tried to intimidate them by threatening them that they would have to resign, followed by a six-month or one-year work ban on them.

If you are in a situation like AA, you have full recourse to law and there is nothing that you need to fear.

Emirates 24|7 spoke with legal experts on employment and they assure that employees have their full rights in place, which you should be aware of.

But, before you jump to conclusions and decide your next course of action, try to understand the reasons behind the non-payment of salaries and look for ways to resolve the issue amicably.

According to Alexander Mcgeoch, head of employment at legal firm Hadef & Partners, “In cases where non-payment of wages does occur, the likelihood is that the employer company is in some kind of financial difficulty.

"If this is the case, then the company may have to terminate the employment of all, or at least some, of its staff. In such a situation, the company should keep its employees fully informed of developments and should notify those on the payroll who are to be made redundant, as soon as possible.

“The alternative, and I believe much less usual, reason for non-payment of salaries is sheer neglect on the part of the employer – and, where this is the reason for employees going without their monthly pay cheque, it is unforgivable,” he explains to this website.

Whatever the case may be, “non-payment of remuneration to employees, in full and on time, is a most serious and fundamental breach of contract,” as Mcgeoch puts it.

If you are in this unhappy situation, you are fully entitled to resort to legal means to ensure all your dues are rightly paid to you.

Non-payment of dues, says Mcgeoch, “Automatically entitles the employee concerned to bring a claim against his (or her) employer. It also exposes the company to penalties under the Wages Protection System Law,” which may also cause damage to the reputation of the company.

“If an employee isn’t paid for two months, he can complain to the Ministry of Labour and also request that his current employment work permit and visa are cancelled without the registration of an employment ban,” says Sara Khoja, Partner at legal firm Clyde & Co in the UAE.

If you are an employee that has not been paid salary and/or any other financial benefits to which you may be entitled (like additional salary in lieu of unused annual leave), this is what the Hadef expert suggests to do.

“Approach the management and request them to be open with you and discuss the prospects of your being paid. If the company managers are not prepared to give any concrete commitment (i.e., to the effect that you will be paid within the next two or three days) or, if they do give such a commitment but thereafter fail to honour their promise, then you are fully entitled to bring a claim against the company.

“This can be done by reporting the matter to the Ministry of Labour (or, as the case may be, relevant free zone authority) who will register your claim for non-payment of salary.

"The law requires that, through the mediation of the appropriate government body (i.e., the Ministry of Labour or, as the case may be, relevant free zone authority), the parties must first endeavour to settle their differences and, if this does not prove possible, the employee claimant will be given a ‘referral’ letter which will enable him (or her) to go straight to the courts and institute legal proceedings against the company for recovery of unpaid dues.”

Mcgeoch also suggest reporting the matter to your respective consulate or embassy. In the case of the larger expatriate communities, the embassy (or consulate) will have a “dedicated” officer whose role it is to look after the interests of those of his (or her) fellow nationals who are facing problems connected with their employment.

Legalities can scare away average people, but this should not be the case if you have been wronged. Employee should not fear reporting cases of non-payment of salary and benefits. It is the employer who is in the wrong for having breached the terms of the employment contract.

“The employer has broken a binding agreement with someone (i.e., the employee)... The government of this country – both at the federal and at the emirate level – is unwilling to tolerate such behaviour,” adds Mcgeoch.

While there may be some such cases, problems regarding non-payment of salaries have been on the decline since the introduction of the federal Wages Protection System Law in 2009.

As per this system, all registered business concerns have been required to pay staff wages though a licensed bank.

Each month the entire amount of the company wages bill has to be paid to the bank in one lump sum and thereafter, acting as the company's agent, the bank distributes the relevant salary amounts to the bank accounts of the individual employees.

The virtue of this system is that, with the cooperation of the agent bank concerned and the Central Bank (to which the agent bank reports), it is relatively easy to monitor the timely payment of staff salaries by employer entities. This means that companies that are in default (i.e., for non-payment of salaries) can be readily identified and thereafter penalised, as Mcgeoch says.

Please see the following link to this press article: http://www.emirates247.com/news/emirates/what-to-do-when-you-do-not-get-your-salary-on-time-2014-06-15-1.552879

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the develop jurisdiction of the UAE.