It is illegal to extend or renew an employee's probation period with the same company, a recent landmark ruling by the Dubai Court of Cassation has declared. This applies irrespective of the duration of the period agreed upon by the worker and employer.
According to Article 37 of the Labour Law, a worker shall be recruited for a probation period of not more than six months. However, the court ruling also covers probation periods of less than six months.
The employer has the right to terminate the employee's services during the probation period without notice or end-of-service payments.
The court ruling stipulates that the worker under probation shall not be recruited more than once by the same company. These provisions were issued in order to achieve a balance between the rights and duties of the employer and employee.
To protect the rights of the worker from any possible abuse by employers, the legislature has stipulated that the probation period shall not exceed six months and shall not be repeated more than once by the same company.
The court made the ruling based upon a case filed by a project manager against his former company. He claimed that he had been employed initially on a three-month probation period which was subsequently extended to six months.
He asked for Dh33,700 as compensation and nine per cent legal interest, plus Dh2,500 as monthly payment of housing allowance from the time of termination of his contract and until he receives all his dues.
The company employed him on November 18, 2001, on a salary of Dh4,500 plus Dh2,500 housing allowance per month. He claimed he was sacked from his job on March 7, 2002, for unjustifiable reasons and that his employer had extended the three-month probation period to six months.
He also claimed that he hadn't received his dues such as a return ticket, housing allowance, notice allowance, salaries due and end-of service benefits. He first tried to resolve the dispute at the Labour Office. But when this failed, he decided to sue the company.
On December 18, 2002, the Dubai Civil Court ordered the company to pay the claimant Dh26,700 plus nine per cent legal interest along with a compensatory amount after the verdict becomes final.
In March this year, the Appeals Court reduced the amount to Dh4,200, plus a return ticket unless the claimant had changed sponsors. The employee appealed that verdict on three major points.
He claimed that he was entitled to receive a housing allowance, but the court considered he was not eligible to collect this as his services had been terminated.
Secondly, he claimed notice payment after the company terminated his contract. The Court of Cassation, however, believed that he wasn't entitled to this because his contract was close-ended.
According to the Labour Law, only employees hired on open ended contracts are able to receive notice payment.
Thirdly, he claimed end-of-service-benefits because he was fired on March 7, 2002, after the end of the initial three-month probation period.
Last month, the Court of Cassation overturned the Appeals Court verdict and ordered a retrial that is expected to take place later this month. The Court of Cassation decided that the extension of the probation period was illegal and the new landmark ruling is based on this.
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