S S Legal Consultants LLC – Your Reliable Legal Partner
By Suneesh | April 26 , 2022 | 01
New Amendments to Commercial Transactions Law
By Suneesh | November 16 , 2021 | 01
The Central Bank of the UAE announced new amendments to the Commercial Transactions Law regarding decriminalisation of cheques, and amendments relating to partial payment of the cheque, and toughen administrative penalties for issuing cheques without funds, in accordance with Decree Federal Law No (14) of 2020, which will come into force on January 2, 2022.
Please be advised of the following: Partial payment means payment of part of the value of the cheque, and accordingly the drawer, the endorsers and the guarantors (if any) shall be partially cleared. For payment of a cheques value, the Law in the UAE does not require that the funds available with the drawee bank are equal to the value of the cheque. In implementation of Article (6 17) of the Law, the bank should, where the fund for payment is less than the value of the cheque, partially pay the value of the cheque up to the available fund, unless the bearer rejects partial payment. In this case and upon each partial payment, the bank shall initial the back of the cheque confirming the partial payment and give back the original cheque to the bearer along with a certificate to that effect (as per the mechanism, which is currently being discussed with the banks and to be circulated soon).
In case of collection through the cheque holder/ beneficiary’s bank, the latter will issue the partial payment certificate to the cheque holder/beneficiary. The bank may keep a copy of the partially paid cheque and a copy of the partial payment certificate issued by it. The bearer of the cheque shall have the right to demand the payment of the remaining amount against the original of the initial cheque, as per the Executive Regulations of the Civil Transactions Law, being considered an execution writ, according to the provision of Article (635 bis) of the Law. The bank, in accordance with Article ( 617) of the Law, shall report the details of the account holder to the Central Bank, in accordance with the mechanism to be circulated soon, in any of the following cases:
1. Where no sufficient and usable funds for the payment of the value of cheque is available
2. Where the drawer, after issuing the cheque withdraw all the fund for payment so that it is not possible to pay its value, or
3. Where the bank partially pay the value of the cheque
Therefore, you are required to abide by the implementation mechanism of the amendments to the Law relating to the partial payment of the cheque to be circulated soon.
You should inform your employees and customers of these new amendments by all the usual means and methods, whether through social media, websites, electronic applications, text messages, or in the form of short messages that are displayed on the screens of ATMs, internal screens, or other traditional or modern electronic means. You should also raise the level of education and awareness of your employees and customers, direct and guide them and enable them to understand the basic risks, provide them with all information related to these new amendments and their effects on them, and clarify the mechanism and method of applying partial payment of the cheque, and the procedures that can be followed in this case accurately, and what is required to be taken into account to avoid legal accountability and penalties resulting from violating the Law and misuse of the cheque. You are also requested to provide the necessary and appropriate means and mechanisms to respond to customer complaints and inquiries and to clarify their rights and responsibilities in relation to the new amendments to the Law. Central Bank’s Notices No. 1202/2010 issued on 31/3/2010 and No. 2161/2003 issued on 3/8/2003, regarding partial payment of cheque, shall be cancelled, once the above instructions come into effect. The instructions mentioned in this notice shall enter into effect on 2 January 2022.
New Labour Law Updates for Private Sectors in UAE
By Suneesh | November 16 , 2021 | 01
3-year contracts
The new law defines one type of contract, namely a limited (or fixed-term) contract, which may not exceed three years and is renewable for a similar or lesser period upon the agreement of both parties. The provisions of the law shall apply to unlimited contracts enclosed in the Federal Law No. (8) of 1980. It is also resolved to convert employment contracts from unlimited to limited within one year of enforcement of the law. The cabinet may extend this period based on public interest.
Judicial fee exemptions
The decree exempts workers from judicial fees at all stages of litigation, enforcement and petitions filed by workers or their heirs with a value not exceeding Dh100,000. Under the new law, employers cannot confiscate employees’ official documents. Workers also should not be forced to leave the country after the end of the work term. The law provides that the employer shall bear the fees and expenses of recruitment and employment and shall not recover them directly or indirectly from the employee.
Leaves in the private sector
Employees are entitled one day paid off with the possibility of increasing weekly rest days at the discretion of the company. They can also receive a range of leave days, including mourning leave that range between 3-5 days depending on the degree of kinship of the deceased, in addition to the five-day parental leave and other leave days set by the cabinet. Following two years of work with an employer, workers are entitled to a 10-day study leave per year provided that they are enrolled in an accredited institution within the UAE.
Maternity leave in the private sector
Maternity leave in the private sector can extend to 60 days: 45 days with full wage, followed by 15 days on half wage. New mothers are eligible to receive additional 45 days without pay leave once they finish their initial maternity leave period in case of any post-partum complications or ailment in the new born. They will have to provide supportive documents to apply sick leave. New mothers of infants with special needs are entitled to a 30-day paid leave after the completion of their initial maternity leave period, renewable for another 30 days with no pay.
Prohibition of discrimination, bullying by employers
The new law protects employees against sexual harassment, bullying, or the use of verbal, physical, or psychological violence by their employers, superiors, and colleagues. mployers may not use any means of force, threaten to penalise employees or coerce them to perform an action or provide a service against their will. The law also prohibits discrimination on the basis of race, colour, sex, religion, nationality or disability.
No discrimination against working women
The amendments emphasise that all provisions regulating the employment of workers shall apply without discrimination to working women, with an emphasis on granting women the same wages as men when performing the same task or other duties of equal value.
Employment of teenagers
Employers cannot recruit minors less than 15-years-old. As per the new law, teenagers are not allowed to work more than six hours a day with one-hour break and should be allowed to work only after submitting a written consent of a guardian and a medical fitness report. Teenagers are not allowed to work on shifts from 7pm to 7am or engage in risky jobs that can cause harm to their physical health, ethics and well-being.
Working hours and overtime wage
Under the new law, it is prohibited for employees to work over five consecutive hours without at least one-hour break. No more than two hours of overtime are allowed in one day for workers. Should the nature of the job require more than two hours overtime, employees must receive an overtime wage equivalent to regular hour pay with a 25 per cent increase. If conditions required employees to work overtime between 10pm and 4am, they are entitled to an overtime wage equivalent to regular hour pay with a 50 per cent increase. People on a shift basis are exempted from this rule. If workers were asked to work on a day off, they must receive a one-day leave or an overtime wage equivalent to the regular day pay with a 50 per cent increase.
Changes to criminal liability for cheques with insufficient funds
By Suneesh | June 25 , 2020 | 01
Changes to criminal liability for cheques with insufficient funds
Decision No. 14 of 2020 (‘Abu Dhabi PP Decision’) was issued by the Attorney General Office in Abu Dhabi which included provisions related to the imposition of fines for bounced cheques of a certain amount. The Abu Dhabi PP Decision is effective from 16 March 2020.
The Abu Dhabi PP Decision imposes fines based on the value of the bounced cheque as follows:
| Cheque Amount / AED | Imposed Fine / AED |
| 50,000 | 1,000 |
| 50,001 | 3,000 |
| 100,001 up to 200,000 | 5,000 |
| 200,001 up to 300,000 | 10,000 |
| 300,001 up to 500,000 | 20,000 |
The Abu Dhabi PP Decision effectively removes the criminal sanction attaching to cheques having a value less than AED 500,000: there will be no arrest order issued against the drawer (or signatory).
The Attorney General also gave the authority to certain members of the Abu Dhabi Public Prosecution to cancel or amend the imposed fine within seven days of issuing such decision.
The Abu Dhabi Decision is similar to a decision issued by the Attorney General Office in Dubai (‘Dubai PP Decision’) and is effective from 4 December 2017.
The Dubai PP Decision imposed fines based on the cheque value as follows:
| Cheque Amount / AED | Imposed Fine / AED |
| 50,000 | 2,000 |
| 50,001 up to 100,000 | 5,000 |
| 100,001 up to 200,000 | 10,000 |
Conclusion
Banks, financial institutions and any beneficiaries located in Abu Dhabi, which receive cheques from a drawer as security should take into consideration that cheques below AED 500,000 no longer attract the same penalty as before. In other words, no arrest order (i.e. fine only) will be issued against drawers providing cheques with insufficient funds for cheques in the amount of AED 500,000 or less. Beneficiaries should consider obtaining other types of security wherever possible.
In Dubai, no arrest order (i.e. fine only) will be issued against a drawer who provides a beneficiary with a cheque having insufficient funds where the cheque is in the amount of AED 200,000 or less.
Economic Substance Regulation
By Suneesh | June 23 , 2020 | 01
As per the Economic Substance Regulation, all UAE onshore and free zone companies and other UAE business forms (referred to as “Licensees”) are required to notify to the Relevant Authorities as to whether they are conducting the relevant activity or not as per the regulation and required to file the necessary details as mentioned in the Notification form.
Relevant Activities:
Banking Businesses
Insurance Business
Investment Fund Management Business
Lease-Finance Business
Headquarter Business
Shipping Business
Holding Company Business
Intellectual Property Business
Distribution and Service Centre Business
The notifications stand mandatory even if the activities are out of scope of ESR. Penalties for failing to notify the Regulatory Authority within the given deadline is between AED 10,000 and AED 50,000.
We could help you in following phases,
1. Assessing ESR applicability to your business & file ESR notification to relevant authority.
2. Ensure ESR compliance with the provisions of regulation.
3. Consultancy and filing returns within 12 months
Please feel free to call or WhatsApp +971 50 3603186, or email at [email protected]
#Economic #Substance #Regulation
Reduction of Salary Permanently? Know Your Rights.
By Suneesh | May 2 , 2020 | 01
An employer may reduce the salary of the employee temporarily or permanently if affected by the current Covid-19 crisis. This is in accordance with Article 2 (4) & (5) of the Ministerial Resolution which states: “Establishments affected by the precautionary measures referred to above, who wish to reorganize its employee relations, shall take the following measures gradually, and in agreement with the non-national employee
4. Temporarily reduction of salary during the mentioned period
5. Permanent reduction of salary.”
Article 5 of the Ministerial Resolution allows an employer to reduce the salary of an employee and states the procedures to do so. Establishments that wish to temporarily reduce the salary of a non-national employee during the mentioned period shall take the following actions:
1. Conclude a ‘Temporary Additional Addendum’ to the employment contract between both parties, in accordance with the template attached to this Resolution, provided that it shall expire at the end of its term or enforceability of this Resolution, whichever comes first.
2. Renewing the Addendum referred to in Clause 1 of this Article shall be in agreement between both parties.
3. The Addendum referred to in Clause 1 of this Article shall be executed in two copies, each party holding a copy, and the employer shall commit to present it to the Ministry whenever asked.
Do you know how to calculate UAE gratuity
By Suneesh | April 6 , 2020 | 01
Contract types
A limited or fixed term contract is where the employee agrees to stay with the company for a certain number of years with a set end date. Resigning before the end of this period could mean one or all of these; a labour ban, loss of labour rights or even payment of compensation to the employer.
An unlimited contract has no such period clause or number of years, and therefore, has no end date. However, a notice period of one to three months is applicable for termination of contract from either side.
Gratuity pay is calculated based on your basic wage/salary paid into your account without additional allowances or bonuses.
Article 134 of the Labour Law clarifies what this constitutes:
“The wage used as a basis for calculating the end of service gratuity shall not include payments made to the worker in reimbursements, housing, transport and travel allowance, overtime pay, representation allowance, cashier’s allowances, children education allowance, allowances for recreational and social services, and any other bonuses or allowances.”
No gratuity pay?
If you are terminated from your job, unless you break the rules as stated in Article 139 of the Labour Law, the employee is still entitled to gratuity pay. The rules in this article state:
The employee shall be deprived of his/her end of service gratuity in the following two cases:
a – If he or she is dismissed from service for any of the reasons set forth in Article 120 or if he or she quits employment in view of avoiding the dismissal in accordance with the article. (This article deals with dismissal during or at end of probation, or due to charges of material loss, failure to perform basic duties even after a warning, interrogation, crime etc.)
b – If he or she resigns without notice in cases other than the ones set in Article 121 (if employer breaches contract or in case of assault), and such with regards to unlimited contracts, or prior to the completion of five years of continuous service in limited contracts.
Calculations for Limited Contract gratuity pay
Less than 1 year of service
Leaving work before completing one (1) year of service means that you are not entitled to any gratuity pay.
Between 1 year and 5 years of service
Employee is entitled to full gratuity pay based on 21 days salary for each year of work.
5 or more years of service
Employee is entitled to full gratuity pay based on 30 days salary for each year of work.
Calculations for Unlimited Contract gratuity pay
Less than 1 year of service
Leaving work before completing one (1) year of service means that you are not entitled to any gratuity pay.
Between 1 year and 3 years of service
Employee is entitled to one third (1/3) of the 21-days gratuity pay.
Between 3 years and 5 years of service
Employee is entitled to two thirds (2/3) of the 21-days gratuity pay.
5 or more years of service
Employee is entitled to full 21-days gratuity pay for each year of service.
Formula
1. Basic salary ÷ 30 = Daily wage
2. Daily wage x 21 = 1 year gratuity figure (Or x30 if applicable)
3. 1 year gratuity figure x years of service = Total gratuity owed
Only continue for Unlimited Contract calculation
4. Total gratuity owed ÷ 3 = One third (1/3) of total gratuity
5. Either take this figure (between 1 and 3 years) or multiply it by two (between 3 and 5 years)
6. For over 5 years, total gratuity owed will be payable.
Voluntary Liquidation of a Limited Liability Company
By Suneesh | February 15 , 2020 | 01
Voluntary liquidation can happen when shareholders decide to end business activity, a resolution must be passed to begin the process and a liquidator has to be appointed.
Steps and procedures for cancelling Limited Liability Company in UAE. will be according to the Federal Law No 2 of 2015 on commercial companies law , articles from 306 to 326
First: Notice of Company’s Dissolution & Appointment of a Liquidator:
- Submission of Registration & Licensing Application Form
- Duplicate of official document showing dissolution of the company, appointment of a legal liquidator and mentioning his name and determining the method of liquidation. This may either be by a resolution of the company’s partners or general assembly duly notarized, or by court order.
- Certified copy of the signature of company’s director(s), and the company’s legal liquidator, as the case may be, authenticated by the Notary Public.
- Original Certificate of Registration in the Commercial Register + the original trade license.
- Copy of the license of the liquidator + Certificate of condition auditor + Letter from the liquidator approving the liquidation of the company.
Second: Cancellation of license(s) & cancellation from the Commercial Registration:
- Certificates issued in the other Emirates indicating cancellation of license(s) (if any).
- Original copy of the final account of liquidation approved by the partners or general assembly and stamped by the legal liquidator.
- No-objection letter concerning cancellation issued by the Ministry Of Human Resources & Emiratisation.
- Visa Cancellation of the partner(s) in case they are sponsored by their license .
- Copy of the notice of the company’s dissolution & appointment of a liquidator to be published in the official newspapers.
- Letter from the partner for the agreement of the liquidation of the company.
- Ministry of Economy resolution (concerning private shareholding).
- UAE Securities and Commodities Authority resolution (concerning public shareholding