Questions & Answers
Arbitrary deduction of salary by the employer
The company has instructed a salary cut (around 10%) retrospectively.
Further, the company has instructed that this salary cut would be effective even on terminated/resigned employees who have either served their notice period or are in the process of serving their notice period.
Accordingly, this will impact the EOSB for terminated/resigned employees. Is this legal? Under which Act of the Labor Law, is this illegal?
Please advise
Dear Sir/ Madam,
Thank you for getting in touch with me on this.
Please note that the acts of your company are contrary to the provisions of the UAE Labour Law.
The company can't unilaterally deduct such proportion from the salary without taking employee's express consent and making this applicable retrospectively.
The company is obliged under law to transfer salary as per the Labour Contract executed between the company and employee.
Any deduction made under the contract ought to be justified under Article 60 of the UAE Labour Law (Federal Law No. 8 of 1980).
I understand that the reason mentioned by the company does not cover under Article 60, and hence, they are in contravention.
Please understand that if the company deducts such salary for more than 2 months then you are eligible to file a labour case and claim the shortfall along with three months salary as compensation.
You should guide the employees who are under notice period to make note of this and raise a labour dispute if they receive less salary and EOSB.
I trust you will find this appropriate.
You can get in touch with me on 052-9495731 or email for further assistance and clarification.
Regards,
Hari Wadhwana
