Questions & Answers
The rights of employees upon shutting down a company
Hi,
I have an LLC company here in the UAE. Due to financial difficulties, I am not able to run it further. Hence I have decided to shut down the company.
I want to check how much notice do I need to give to the employees. All the employees are on limited contracts. Can I issue a 30 day-notice period letter to them for operations closure?
I will give the salary to them till the last day of their service and will also provide them with airfare to get back to their home countries after visa cancellation.
Also, I want to write in the notice period letter that if at all I find any suitable buyer for the company, the company shall continue under the new buyer's name. But if no suitable buyer is found till the notice period ending, I shall liquidate the company.
Kindly advise on the legal complications involved in this!
Hi,
We have two options:
- The first one is to liquidate the company permanently. The employer should commit to giving all the employees in the company their rights without any reduction. In case he refused, the employee can file a labor complaint and the liquidation procedures stop until the commitment with all the labor rights of the employees.
- The second one is that the liquidation should be in parallel with selling the company. Here, the previous employer should commit to all the commitments and the labor rights of his employees. The labor code gave the first 6 months after transferring the company as a chance to do these commitments; like salaries and so on. The new employer should not terminate any employee through this period or force any employee to leave his job unless it ends at the end of the contract.
