Question: I work as a salesman at a mainland company in Dubai. My offer letter mentions a monthly salary, benefits, and commissions for exceeding my target. While my salary is paid on time, my commissions are not. I receive the commissions in certain months sometimes, but not always. Is there a legal way to handle this?
Answer: In the UAE, the salary of an employee includes his/her commissions if the same is offered by an employer and it is mentioned in the employment contract of an employee.
The term ‘Salary’ is defined under Article 1 of the Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations as “The basic salary plus allowances, whether in cash or in kind, prescribed for the employee under the employment contract or this Decree-Law. These may include any benefits in kind provided by the employer to the employee or their equivalent in cash if they are prescribed as part of the salary in the employment contract or the establishment bylaws, or allowances given to the employee in return for any effort exerted, or hazards encountered in the course of performance of his work, or for any other reasons, or cost of living allowance, a percentage of sales or a percentage of profits paid in return for anything marketed, produced or collected by the employee.”
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In the UAE, a signed offer letter is usually seen as an informal agreement between an employer and a potential employee. It is an agreement of mutual understanding between an employer and a prospective employee. On the other hand, a signed employment contract is a formal, legally binding document between the two parties.
Therefore, “all contracts are agreements, but all agreements are not contracts”.
An employment contract that is registered with the Ministry of Human Resources and Emiratisation (MoHRE) is legally binding. In contrast, the details outlined in an offer letter may not hold the same legal validity.
However, if an employee’s contract with MoHRE-registered contract does not specify the commissions mentioned in the offer letter, the employee may claim those commissions from the employer. This applies if the offer letter specifically mentioned that getting paid commissions is a standard practice within the employer’s organisation.
In addition, an offer letter may be treated as an agreement, and if it contains terms that are more beneficial to the employee, those terms may be considered valid and applicable.
This is under Article 65 (1) of the UAE Employment Law, which states, “Rights laid down in this decree-law shall consist of the minimum employees’ rights. The provisions of this Decree law shall not prejudice any of the rights prescribed for employees under any other legislation, agreement, declaration, regulation or employment contract, giving rise to rights that are more beneficial than those laid down in the provisions of this Decree-Law.”
Therefore, if there is a dispute between an employer and an employee regarding commission payments and if the issue is brought before a UAE court with jurisdiction over employment matters, the court may decide on the amount and breakdown of the employee’s salary, including allowances and commissions.
This is in accordance with Article 22 (1) of the UAE Employment Law, which states, “Amount or type of salary shall be determined in the employment contract. If such amount or type is not determined in the employment contract, the competent court shall determine the same as an employment dispute.”
Based on the aforementioned provisions of law, if your employment contract does not contain the terms of commission and if the same has been mentioned in your offer letter, you may request your employer to pay you the commission regularly as agreed in the offer letter.
Furthermore, if your employer pays commissions, this could be seen as their standard practice. Therefore, your employer might be required to pay you the commissions outlined in your offer letter.
In case your employer fails to pay the agreed commission, then you may consider filing a complaint against your employer with the MoHRE. If you are not able to amicably resolve the issue through this process, you can then take the matter to a court with jurisdiction in Dubai.
Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: [email protected] or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.