Total salary basis of gratuity: Dubai court

A worker’s end of service benefit should be calculated with respect to his total salary and not just the basic payment, according to a new ruling by the Dubai Court of Cassation. The decision comes in a case where an employee sought dues of up to Dh159,000 from his employer, which was rejected by the Court of First Instance and later overturned another court. However, there was no indication from the court whether this was a precedent or only a ruling for this particular case. Accusing the company of his arbitrary suspension, the employee in his lawsuit demands three months’ salary as compensation for sacking him without notice, Dh11,000 as salary of the last month he worked, Dh22,000 as leave allowance and ticket to his home country and Dh82,000 as his end of service gratuity. The plaintiff also claimed in the lawsuit that he worked in the company as a Director of Advertising and Editor of a magazine owned by the company. However, Court of First Instance in its judgment rejected his lawsuit and ordered the employer to pay a total amount of Dh54,000 to the employee. The employee appealed against the verdict to the Court of Appeal which ordered the employer to pay the value of a return ticket to the complainant’s home country in addition to the amount ordered by the earlier court. The prosecution also appealed against the ruling on the basis that the end of service benefit of the employee was calculated only on according to the basic salary of worker, which it said was against the labour law. The Court of Cassation accepted the appeal and directed the case to the Court of Appeal asking for a new panel judges to look into the case. The Court of Cassation observed: "The pay in accordance with the provisions of Article I of the Labor Law includes all that a worker receives as emolument, whether in cash or in kind, hence the gratuity should be calculated according to the entire amount received by a worker, including his monthly commission.” Legal expert clairifies readers queries The verdict of the Court of Cassation, which considered commission paid to an employee on a regular basis within his basic salary should be calculated for end-of-service gratuity with respect to his total salary, and not just the basic payment, has drawn much reaction from readers. Readers comments focused on the applicability of the ruling by the Court of Cassation on similar cases and not only the case in which the verdict was issued. Some of the comments raised concerns on that some companies deliberately issued employment contracts for workers with low basic wages to reduce gratuity.  Emirates 24|7 directed the questions the lawyer Atef Awad, who said: “The provisions of the Supreme Courts including the Court of Cassation is the basic reference for the primary and appellate tribunals, where the Supreme Court and the Court of Cassation are the ones establishing the legal principles". He added: “Based on this, and although the verdict of the Court of Cassation issued in this case, it gives every worker the right under the same conditions to file a lawsuit demanding the same right. “Regarding the action which should be adopted by the employee in case the company has deliberately given a low basic salary in the employment contract to reduce the end of service payout, the ruling of the Court of Cassation responded clearly and affirmatively that the employee should seek to prove that the commission paid to him is in permanence and continuity, and thus becomes part of his basic wage and must be included in his end of service gratuity.” Awad pointed out that salary may be proven by all methods, including testimony of witnesses and salary transfer certificates and certificates of banks. He added: “In case the employee proves that the commission is permanent and ongoing it will be considered a part of the basic wage and the court hearing the case has discretionary powers in this matter.”  “The court must be satisfied with the evidence submitted by the employee or his lawyer and circumstances of the case. The provisions of the Court of Cassation become - mostly - a reference to the primary and appellate tribunals. However, their provisions will be challenged once again,” he said.