QUESTION: My uncle has been running a small workshop (with six employees, including technicians, driver and helpers) to repair air-conditioners since 2000 but now due to some financial issues, he wants to close it down and look for a new opportunity somewhere else. My questions are: Are the workshop employees entitled for gratuity? If yes, what is the minimum job period required for them to be entitled for gratuity? How is gratuity accounted in Qatar Labor Law? Is it 30 days’ salary per annum or different? The gratuity should be paid on current salary or at the salary when person was hired? 
SM, Doha

ANSWER: Employees are entitled for gratuity and other benefits even if the company is in financial difficulties. As per Article 4 of the Labour law, any release, compromise or waiver of the entitlements prescribed for the worker by labour law shall be deemed void. 
According to Article 54 of the Labour Laws - Law No14 of 2004 -, the employer is obliged to pay end-of-service gratuity to any employee who has completed one or more years of continuous service. 
The end-of-service benefit shall be calculated at the rate of three weeks’ last drawn basic salary per year of service. The employee is also entitled to be paid gratuity pro-rata for fractions of service.
However, for employees who were in service with a national firm prior to its effectiveness (January 2005) of the prevailing Labour Law, the gratuity entitlement and its calculations were done as per the provisions of Law No 3 of 1962 as it states the agreement concluded between the employer and employee shall decide the gratuity entitlement.

Payment through post-dated cheque
Q: One of our clients is offering to give a post-dated cheque to our company for a completed project. How is it possible to confirm the availability of fund in the account on the cheque date? Is there any way to prevent the fund from transferring? 
UH, Doha 

A: The payee can ask the drawer or the client for the certification of the cheque to secure the payment. According to Article 566 of Trade law, the drawer has the right to ask for certification of the cheque and such certification shall confirm the availability of sufficient funds against payment on the date of the endorsement and the bank shall set aside the funds for payment of the cheque when it is presented. 
The drawee shall not refuse the certification of the cheque if there is a sufficient fund against payment. The signature of the drawee on the face of the cheque is deemed as its certification. 
The funds against payment of the certified cheque shall remain frozen with the drawee and under his responsibility in favour of its bearer, until the end of the period set for presenting the cheque for payment.

Arbitration agreement
Q: We have a contract dispute for which the resolution is through arbitration. We are told that arbitration is expensive. In order to reduce expenses, will we be allowed to proceed with court case even when there is an arbitration clause in the contract? 
SF, Doha

A: According to Article 192 of the civil and commercial procedure law, the arbitration agreement implies the relinquishment of the parties’ right to refer the dispute to the courts having original jurisdiction. 
If a dispute arises in respect of the execution of a contact that includes arbitration, and one of its parties brings an action before the competent court, the other party may raise arbitration as an objection to the non-acceptance of the court action. In practice, the courts will generally stay proceedings on a valid application pursuant to this provision. 
The right to object to the court hearing the dispute on the basis of an agreement to arbitrate is likely to be lost, if the other party failed to make the objection at the first hearing. 

Medical check-up for the employees
Q: Is it mandatory to conduct annual medical check-up of all employees? A company I know of is offering executive check-ups for its supervisory staff every two years. What does the employment law stipulate in this regard? 
AB, Doha
A: Article 105 of the Labour Laws obligates the employer conducting medical check-up only for workers exposed to the dangers of infection with vocational diseases. The check-up should be carried out in accordance with the measures specified by the competent authorities. The employer shall keep the results of these check-ups in the files concerning the workers. If the result of the check-up shows the infliction of the worker with one of the occupational diseases, the employer shall notify the department thereof within three days from the date of its knowing.

*Please send your questions by e-mail to: [email protected] (Mobile:55813105)

LEGAL SYSTEM IN QATAR

According to Article 119, the company’s regulations set forth the methods adopted to determine the remuneration of the members of the board of directors. The remuneration may be a percentage of profit, which shall not exceed 10% of the net profit after deduction of depreciation and legal reserves and dividends of shareholders which should not be less than 5% of the company paid capital were distributed among shareholders.
As per Article 120, every financial year, the board of directors shall prepare the balance sheet of the company, statement of profit and loss, cash flow statement and explanations, to be compared with the previous financial year and audited by the company’s auditors together with a report on the company’s activities and its financial position during the previous financial year, and the future plans for the coming year. 
The board prepares these reports and papers within a period not exceeding three months from the end of financial year of the company and these shall be presented to the general assembly that should be held within four months from the date of the expiry of the company’s financial year.
The board of directors invites all shareholders to attend the general assembly meeting by issuing invitations through registered mail and also by publishing the convening of the general assembly in two daily local newspapers either of which is to be issued in Arabic, or on website of stock market and on company website at least 15 days before the general assembly. 
The invitation shall be accompanied by an agenda of the general assembly, all the above mentioned statements and documents and the report of the auditors. Copies all the documents should be submitted to the concerned department also. 
According to Article 122, at least three days before the session of the general assembly called upon to consider the balance sheet of the company and the board of directors’ report, the board of directors shall make available for examination by the shareholders, a detailed statement that includes the following information: (1) All the amounts received by the chairman and every board member during the financial year by way of fees and salaries and compensation for attending board of directors sessions and expenses allowances, and any other amounts in whatever capacity it may be; (2) Benefits in cash and in kind enjoyed by the chairman of board or member during the financial year; (3) Remunerations proposed by the board of directors to be distributed among the board members; (4) The amounts allocated for each member of the board; (5) Any transactions in which a board member or the director has had an interest in conflict with the interest of the company; (6) Amounts actually spent for any form of advertisements with the details for each amount; and (7) Donations with a report about the recipients and justifications and details.
Banks and other financial institutions are required to prepare a report on the monetary loans, credit facilities, or guarantees granted to the chairman or board members during the financial year and the report should be annexed with the auditors’ report certifying that the foregoing were made without violating the provisions of this law. The chairman of the board of directors and any of the members should sign the report.

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