Question: I am employed as a salesman at a mainland company in Dubai. My offer letter specifies a monthly salary, benefits, and commissions for surpassing my target. Although my salary is consistently paid on time, my commissions are not. I occasionally receive commissions in certain months, but not consistently. Is there a legal recourse for this situation?
Answer: In the UAE, an employee's salary includes commissions if these are offered by the employer and specified in the employment contract. The term 'Salary' is defined under Article 1 of Federal Decree Law No. 33 of 2021 on 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.' This includes 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.
In the UAE, a signed offer letter is typically viewed as an informal agreement between an employer and a potential employee. Conversely, a signed employment contract is a formal, legally binding document. Therefore, 'all contracts are agreements, but all agreements are not contracts.' An employment contract registered with the Ministry of Human Resources and Emiratisation (MoHRE) is legally binding. However, the details in an offer letter may not carry the same legal weight. If an employee's contract with a MoHRE-registered contract does not specify the commissions mentioned in the offer letter, the employee may claim those commissions from the employer, especially if the offer letter indicates that receiving commissions is a standard practice within the employer's organization.
Additionally, an offer letter may be treated as an agreement, and if it contains terms more beneficial to the employee, those terms may be considered valid and applicable, as per Article 65 (1) of the UAE Employment 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, in accordance with Article 22 (1) of the UAE Employment Law.
Based on these legal provisions, if your employment contract does not include the terms of commission and these have been mentioned in your offer letter, you may request your employer to pay you the commission regularly as agreed in the offer letter. If your employer fails to pay the agreed commission, you may consider filing a complaint against your employer with the MoHRE. If the issue cannot be resolved amicably through this process, you can then take the matter to a court with jurisdiction in Dubai.
