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Non-payment of salary by an employer

Non-payment of salary by an employer

Non-payment of salary by an employer

For all the employees, getting their full wages or salaries on time in lieu of the services rendered by them is one of their fundamental rights. However, a large number of employees suffer from severe financial and mental hardship on account of non-payment of their legally entitled dues by their employers.

In this article, we will explore all the legal provisions by virtue of which an unpaid labor or an employee can get his dues.

Legal provisions surrounding payment of salary or wages
In UAE, an employee shall be paid a minimum salary, which should be sufficient to cover the basic needs of an employee. The minimum salary is determined after having regard to various factors such as the cost-of-living index and the particular profession to which the employee belongs.

Article 56 of the UAE employment law provides that an employee shall be employed either on monthly or yearly remuneration basis, and the employee shall be paid at least once in a month. If an employer fails to comply with the aforesaid requirement, it shall be considered as a refusal of employee’s right of remuneration and subsequently, a breach of UAE employment law.

An employer shall be considered late in payment of salary if he doesn’t pay the same within 10 days of maturity date. If the employer doesn’t pay the worker’s dues within 30 days of maturity date, it shall be presumed that the employee has been denied from his ‘right to salary’ and the aggrieved employee can initiate legal action with The Ministry of Human Resources and Emiratization (MoHRE).

Legal consequences for delay in payment of salary
As discussed above, a delay shall be considered if the employer fails to pay the salaries within 10 days from the maturity date. The employer shall be subject to serious penalties, such as

  • The employer may be referred to the judicial authorities for penal actions;
  • Legal action against the company may be initiated, and all the partners will be arraigned as offenders;
  • The owner of the company will not be able to incorporate a new company;
  • The bank guarantee of the employer may be liquidated.

If the number of employees in a company are more than 100, and the company made a delay of more than 60 days in payment of salaries, a fine of AED 5,000 per worker whose wage is delayed will be levied, and a maximum penalty of AED 50000 to be imposed in case of multiple workers.

Recently, a new provision has been incorporated which empowers Dubai courts to pronounce orders involving freezing the assets of the company, if it fails to the dues of more than 100 workers. It is interesting to note that the execution courts can issue this order even before a final verdict. Such an order will remain in force until a final verdict is pronounced by the court or an amicable settlement is reached between the parties. If no resolution takes place, the asset of the company will be liquidated to pay off the dues of the employees.

Right of employees to leave the workplace without giving a notice
Article 121 of the UAE employment law provides for the conditions in which an employee can leave the workplace without giving a notice. These conditions are as follows-

  1. If the employer fails to fulfil the contractual obligations, such as non-payment of salary, bonus, etc.
  2. If the employee is assaulted by the employer or his legal representative.

In short
In UAE legal framework, ample provisions have been provided to the employee to get their dues on time from the employers. The recent amendment relating to the freezing and attachment of company’s assets add more stability in the existing legal structure. It is recommended to all the employers to not make any negligence in payment of the salaries to their employees to avoid future troubles.

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