UAE Labour Law: When, why, by how much can pay be cut

Employers in the UAE can legally fine or deduct an employee’s pay for misconduct and breach of duties.

This is specified in Article 102 of the country’s Labour Law.

However, the pay cut that employees get is governed by another article, which sets the legal limit by which the boss can reduce the pay.

The proceeding Article 104 of the Law states that the fine may be a specific amount or an amount equal to the wage of the worker for a specific period.

The Law clearly states that the fine prescribed with regards to one breach may not exceed the wage of five days.

Additionally, for the settlement of the fines imposed on the worker, a maximum amount equal to the wage of five days may be deducted from the wage of the worker per month.

To safeguard the interest of the workers, Article 105 of the Law requires that employers record such details in a special register along with the cause and circumstances when the fine was imposed clearly stating the name and wage of the defaulting worker.

To ensure that such fines are not misused, it is required that a special account be allocated for this purpose and the monthly proceeds are to be used for the social welfare of the workers in accordance with the decisions issued by the Minister of Labour and Social Affairs in this regard .

Furthermore, Article 106 states that the penalty of deprivation of the periodic allowance may only be imposed once per year and such allowance may not be deferred for more than six months.

Besides, the financial penalty stated above, an employer can also deprive an employee a promotion as a disciplinary act.

However, this penalty of depriving promotion may not be imposed for more than one promotional cycle, as elaborated in Article 107.

The penalised worker shall be then promoted during the following promotional cycle should he meet the necessary conditions for such a promotion.

These disciplinary sanction are more or less imposed for breach of acts at the workplace.

No fine may be imposed on the worker for an act perpetrated outside the workplace, unless it is connected to the work, the employer or the manager in-charge.

It is not permitted to impose more than one sanction or combine any disciplinary sanction with the deduction of any part of the wage of the worker.

The actions stated in Article 102 can only be imposed after the worker is notified of the penalty in writing and after having heard the worker and his defense, which should be thoroughly investigated and then recorded.

It is also mandatory that the worker shall be notified in writing of the sanctions imposed, the type, the amount levied as fine and the causes of the imposition.

Additionally, the worker may not be accused of a disciplinary offense after 30 days of the discovery and no disciplinary sanction may be imposed after 60 days from the date of the end of the investigation in the offence of which the worker is found guilty.