I was terminated on garden leave. Can the employer deduct my transportation allowance from the notice period?

It is generally a standard practice for companies to deduct transportation allowances from the final settlement if an employee does not serve their notice period; however, this should align with company policy and local labor laws.

Hello,

According to the UAE Labor Law, unless specified otherwise in your employment contract, an employee is generally required to serve a notice period of 30 days before leaving the company.

However, in certain circumstances, the employer may waive this requirement and allow the employee to leave immediately.

If your employer decides not to have you work during the notice period, they may still be required to pay you for the full notice period, including your regular allowances, such as the transportation allowance, unless your contract states otherwise.

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Regarding your question about the notice period and deducting allowances (such as transportation allowance) in the final settlement, here is the explanation based on the labor laws in the United Arab Emirates:

1. Notice period:

Exemption from service during the notice period:

If the employer decides to exempt the employee from work during the notice period, the law obliges the employer to pay the employee the full gross salary for that period, including all allowances (such as transportation allowance).

Article (43) of the new UAE Labor Law stipulates that the party exempted from work during the notice period is entitled to receive his full financial dues.

What is calculated in the notice period:

Basic salary:

Allowances that are part of the total salary, such as housing allowance, transportation allowance, and any other allowances stipulated in the contract.

2. Deducting transportation allowance during the notice period:

Is it permissible to deduct?

The employer may not deduct the transportation allowance or any part of the total salary if the exemption from work during the notice period was based on the company’s own decision.

Deductions can only be made if the contract or company policy clearly states that the allowances are based on actual service (for example, use of company-provided transportation).

Final settlement:

The final settlement includes all financial entitlements to the employee, including the gross salary for the notice period.

3. Customary practice:

It is a legally compliant practice for the employee to be paid the gross salary (basic salary and allowances) during the notice period, even if the employee does not work during that period.

Welcome.

It is not typical to deduct the transportation allowance from the notice period if you're not serving it.

However, each company may have different policies. We recommend booking a consultation to review your contract and the company’s policy in detail. We specialize in these matters.

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