A look at what holds good under regular and COVID-19-related circumstances
Question 1: I have been working in a private company for two years. In February this year, I applied for annual leave for two months and obtained approval. I then left for my country. When it was time for me to come back, coronavirus took over. I was unable to enter the UAE and resume my work. I sent a letter to my company in this regard via e-mail, but three weeks ago, I learnt that I have been fired due to my failure to return to work. Is such a dismissal legal?
Answer 1- Article 90 of the UAE Labour Law states that “without prejudice to the instances in which an employer is entitled to dismiss a worker without notice or without the gratuity provided for in this law, an employer shall not dismiss a worker or serve a notice of dismissal on him while the worker is on leave provided for under this section”.
The stipulation in paragraph (j) of Article 120 of the Law on Regulating Work Relationships and from what is applied in the jurisdiction of this court that the employer may fire the worker without warning in the event of his absence, and that this right requires the absence of the worker without a valid (legitimate) reason for more than 20 non-successive days during one year or more than seven consecutive days, the court has full authority to assess the validity of the employer’s defence, which was expressed in the absence of the worker from work.
Dubai Court has settled that, “The legal concept of force majeure, which if it occurs to the terms binding on both sides of the contract, makes it impossible to implement the obligation in accordance with Article No 1 of Article 273 of the Civil Transactions Law requires for the description of accidents or force majeure to be: exceptional, not familiar, not possible to expect it at the time of contracting nor can it be paid after it occurred and the judge has the jurisdiction to assess this.”
As a conclusion, the termination exists even if it is prohibited as per Article 90, but to decide whether the termination is arbitrary or not, one must refer to the court’s jurisdiction taking into consideration the documents, circumstances of the case, including for example the coronavirus situation, which resulted in the shutting down of airports, consequently affecting the implementation of the employment agreement.
What is my liability if there is a case against my company?
Question 2: I am a partner at an LLC company. A civil case has been filed against the company. My name is involved in the case along with the manager of the company. What is my liability?
Answer 2: A Limited Liability Company (LLC), as defined by Article 71 of UAE Federal Law No 2 of 2015, concerns commercial companies (New CCL) and came into force on July 1, 2015, replacing the existing Federal Law No: 8 of 1984 and its amendments concerning commercial companies. LLC is a company where the number of partners is at least two but shall not exceed 50. A partner shall be liable only to the extent of the share in the capital. A single natural or corporate person may incorporate and hold an LLC. The holder of the capital of the company shall not be liable for the obligations of the company other than to the extent of the capital as set out in its Memorandum of Association.
Therefore, as per the article, the general rule is that a shareholder in an LLC is responsible only to the extent of his share /shares in the capital of the company. The exception to this general rule, as the court has reasoned, is that such a shareholder will be held personally liable, if he has exploited the principle of the independent liability of the company, as a means to conceal fraudulent acts or misappropriation of funds of the company in order to cause harm to his partners or creditors. In such a case, the protection bestowed by law for a shareholder in a limited liability company will not apply. He will be held liable in his personal capacity for such dispositions in a way that such liability will extend to his personal assets.
