In a key legal decision, the Abu Dhabi court ordered a private company to pay AED 110,400 (approx. Rs 26 lakh) to an employee who never began work despite signing a contract. The employee’s salary was withheld from November 2024 to April 2025, even though the delay was caused by the employer. The court emphasised that under UAE labour law, wages are a legal right once a contract is signed, regardless of job commencement. The company’s defence, citing unapproved leave, was dismissed due to a lack of evidence. The case highlights the enforceability of employment contracts and the employer’s duty to honour them.
Abu Dhabi court orders firm to pay AED 110,400 over breach of employment contract
The employee, whose identity was not revealed, requested a court order after he was denied his salary for the period from November 11, 2024, until April 7, 2025. Despite being provided with a formal offer letter and signing a fixed-term contract of employment but as reported, the company continuously delayed the start date to work. The agreement clearly stated a basic monthly allowance of AED 7,200 with a sum of AED 24,000.This variation between the contract terms and the company’s actions formed the ground for the action in law. The Abu Dhabi Labour Court ruled that the work commencement delay was the fault of the employer and not that of the employee. This was proved using the employee’s wage report, signed labour contract, and documents submitted through the case management system of the court.According to Khaleej Times, the court emphasised that the employer failed to fulfil their duty of bringing the employee on board and hence was held liable to pay the delayed wages.
UAE court applies Article 912: Employers must justify any salary withholding
The court decision reaffirmed that, as per Federal Decree-Law No. 33 of 2021, which governs UAE labour relations, employers have an obligation to pay salaries on time according to the Ministry of Human Resources and Emiratisation-approved system.As reported, relying on Article 912 of the Civil Transactions Law, the judge emphasised that a worker’s wages are a right and cannot be deducted without formal proof, like a written waiver or legally binding reason. This interpretation makes it clear that a worker’s right to salary starts when the contract is signed, and not when physical joining happens.
Abu Dhabi court rejects employer’s unproven claim about employee leave
The employer justified its action on the ground that the employee “did not report for duty and proceeded on leave.” The court, however, found no evidence of any inquiry or formal record of such leave.The employer confessed to taking only eight days of leave, which the court accepted and deducted from the overall compensation duration. The worker was left with four months and 18 days of salary, which equalled AED 110,400. This ruling has wider implications for UAE employers. It illustrates that when the employment contract is executed, it is enforceable by law, irrespective of whether the worker has commenced work. Companies need to make sure they do not procrastinate in bringing employees on board without valid and communicated reasons, lest they may be held liable in court.
