Questions & Answers
I supplied goods to a client who fled the country without paying. Can the employer hold me liable for that?
I work in sales and did a transaction worth AED 156k. We supplied goods to a client, but he did not pay us and eloped with the goods and money.
Now the company is asking me to pay for the losses. Advise if this is legal.
Dear Client,
Thank you for reaching out regarding your current situation involving the unpaid transaction of AED 156,000 and your employer’s request for you to cover the resulting losses.
Please note the following from a legal perspective under UAE law:
1. Employee Liability:
As an employee, you are generally not personally liable for losses resulting from a client’s failure to pay, provided you have acted in good faith, followed company procedures, and there is no evidence of gross negligence or fraud on your part.
2. Company’s Legal Recourse:
In such cases, the company’s appropriate legal remedy is to pursue the defaulting client through civil legal channels, not to seek recovery from its staff.
The responsibility for commercial risk typically lies with the business, unless there is a specific contractual agreement that shifts this risk to the employee.
3. Employment Contract and Policies:
Unless your employment contract or internal company policies explicitly state that you are personally liable for client defaults, and you have agreed to such terms in writing, your employer does not have legal grounds to require you to pay for the loss.
4. Recommended Action:
- Request written clarification from your employer regarding the specific grounds for their demand.
- Review your employment contract and any related policies.
- If you followed all required procedures and there is no evidence of misconduct, you should not be held responsible for the client’s default.
- If the company continues to insist, you may wish to seek further legal advice or approach the Ministry of Human Resources and Emiratisation (MOHRE) for support.
Conclusion:
Based on the information provided and in the absence of any evidence of negligence or a specific agreement to the contrary, it is not legal for your employer to require you to pay for the client’s unpaid debt.
The company’s legal recourse is against the client, not the employee.
Should you require assistance in communicating with your employer or further legal support, please do not hesitate to contact us.
Best regards,
Dear Questioner,
Thank you for your message.
Based on UAE Labour Law and general legal principles:
You are not personally liable for business losses unless:
- You acted with gross negligence, fraud, or intentional misconduct.
- There is a signed agreement that clearly states you are financially responsible for unpaid client invoices (which is rare in employment contracts).
In your case:
If you simply performed your sales duties in good faith and followed normal company procedures, you cannot be forced to pay for the AED 156,000 loss.
It is the company’s responsibility to perform due diligence on clients and manage credit risk.
What You Should Do:
Request the company to provide written justification for their demand.
Review your employment contract to check if there’s any clause regarding liability (I can assist with this).
If they deduct your salary or pressure you illegally, you can file a complaint with MOHRE or the Free Zone Authority (if applicable).
Let me know if you'd like help drafting a response to your employer or reviewing your contract terms.
Best regards,
Mohammed Salah
Legal Consultant
Dear questioner
Generally, it is likely illegal and unjust for your company to make you, as a sales employee, personally liable for such losses, unless very specific and exceptional circumstances apply, which would need to be clearly defined in your employment contract and proven by the company.
Non-payment by clients, especially in sales, is a normal business risk that the company undertakes. It's typically factored into pricing, credit policies, and risk management strategies.
Employees are usually hired to generate sales, not to bear the financial burden of client defaults. If they file a case against you for the loss, then we can file a defense.
If you need further clarification, kindly share your WhatsApp number.
Dear Inquirer
We are pleased to serve you and address your inquiries.
Since the actions are carried out in the name of the company and on its account and based on the established procedures, they are the responsibility of the company.
Contact us via email or call our offices in Dubai or Sharjah.
Jasim Al Haddad Advocates & Legal Consultants
For an employer to legally claim losses from an employee's salary, there usually needs to be evidence of the employee's negligence, intentional wrongdoing, or violation of company policy that directly led to the loss.
If you acted in good faith within the scope of your duties and followed company procedures (if any existed for client vetting), you should not be held liable for the client's criminal act.
Under UAE law, employers can be held liable for the actions of their employees committed within the scope of their employment.
This principle suggests that the company bears the business risks associated with its sales operations.
If you need further clarification, you may ask.
According to UAE law, an employee cannot generally be held personally liable for losses caused by a client, especially if the goods were supplied as per company procedures.
However, if there was negligence or failure to follow internal protocols on your part, partial liability may be considered.
Our center specializes in such cases — you can contact us on WhatsApp for more details and legal support.
We are honored to provide you with specialized legal support for your case.
If you have any further inquiries regarding your matter, we would be happy to assist you.
