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22 May 2024

'Employer cannot take back employee benefits'

By Mohammed Al Sadafy

An employer who decides to give new benefits to employees will not be able to reduce or alter them in future, according to a new legal principle established by Dubai Court of Cassation.

Based on this principle, the court rejected the appeal of a company which had approved an additional half-month’s salary as bonus for each year of service for workers who have served more than 10 years and then reneged on the decision.

The court issued these new legal principles when considering the case of an employee against his company. The employee asked the court to compel the company to pay him Dh636,000 as his dues .

The plaintiff said in his complaint that he joined the company on a monthly salary of Dh5,000 and was surprised when the company terminated his services.

The Court of First Instance issued a verdict obliging the company (the defendant) to pay Dh66,000 and a return ticket to the employee (plaintiff) unless he takes up another job.

The employee did not accept the ruling of the Court of First Instance and challenged it in the Court of Appeal.

The Court of Appeal amended the ruling of the Court of First Instance by adding Dh22,000 as end-of-service gratuity, bringing the total to Dh88, 000.

The company did not accept this ruling and appealed before the Court of Cassation which issued the above-mentioned legal principles.

The company said in its appeal that the decision to give half-a-month’s salary per year for workers with more than 10 years of service was just a draft resolution and was supposed to be explained in another decision to be issued later.

The company said it had decided to suspend the earlier decision until issue of a memorandum of implementation.

However, the Court of Cassation rejected the justifications of the company and confirmed its ruling that it was clear from the company's decision on additional end-of-service benefits that it has been adopted by the chairman of the company.