QUESTION: I have been working for a company for more than two years on an unlimited contract. On February 27 this year my employer called me to his office and informed me that my services were terminated. I asked him to issue a termination letter but he refused. He gave me two choices: to use their visa to get a new job but on condition that I would not receive any gratuity or to cancel my visa and get my benefits but I would remain under a four-year ban to work in Qatar. Am I still under employment? Please advise.
RT, Doha
ANSWER: Restraint of trade for four years will be applicable only when termination is effected under Article 61 of the Labour Laws. Oral termination of employment contract by the employer is not in compliance. Therefore as per the Labour Law, the employment relationship is still valid and the employee shall be entitled to all his rights, including salaries and labour entitlements or other benefits.
Advice of the employer on working for another employer with the same visa is considered an offence by law and the employee may be subject to a penalty of imprisonment plus fine. Article 15 of the Sponsorship Law prohibits employer to allow its employee to work with any other.
Contracts, documents must be in Arabic
Q: Our contract is only in Arabic and as per our office, Arabic is the only language legally allowed. I have been working with a company for the last 10 years against a basic salary of QR2,500 plus QR1,200 allowance. Every year or two, the company gives an increment but not on basic salary but on the allowance. How do they calculate the gratuity when I leave the company?
AS, Doha
A: As per Law, all contracts and other documents shall be made in Arabic. The employer may accompany such contracts, documents or written instruments with translations into other languages. However, in case of any difference the Arabic text shall prevail.
Gratuity is calculated at the rate of the last basic salary received by the employee. Allowances are not considered in the calculation of the gratuity. Article 54 of the Labour Law provides that in addition to any other payments to which an employee is entitled on the termination of his employment, he shall also be entitled to gratuity provided he has worked for the same employer for a period of one year or more.
Tax rates for companies
Q: Please advice on tax rates in Qatar. We are a company based in the UAE negotiating with a local partner to set up a new establishment. Our company will undertake the management at an agreed payment formula.
ST, Doha
A: Article 11 of the Tax Laws, the tax rate shall be 10% of the taxable income of the taxpayer during the taxable year. Withholding tax rates with regard to payments made to non-residents with respect to activities not connected with a permanent establishment in the state shall be (i) 5% of the gross amount of royalties and technical fees and (ii) 7% of the gross amount of interest, commissions, brokerage fees, directors fees, attendance fees and any other payments for services carried out wholly or partly in the state.
Client fails to fulfil obligation
Q: We have made a contract for certain construction work and the client is under obligation to provide all approvals. Now almost nine months are over since the contract has been signed. The client hasn’t even initiated any approval procedures. Could we terminate the contract?
ST, Doha
A: According to Article 692 of the Qatar Civil Code, where the execution of the work requires the client to do a certain act but he fails to do it at the appropriate time, the contractor may instruct him to do it within a reasonable time limit which he shall prescribe. If the time limit expires without the client’s performance of his obligation, the contractor may request termination of the contract without prejudice to his right to compensation if there are grounds therefor.
Dismissal during vacation against law
Q: My company terminated my services while I was away on vacation and it even seemed to have cancelled my visa. Is this legally correct? I have a bank loan and if my visa is cancelled how can I clear the loan? My company was paying only a very small salary. What’s the minimum salary for an engineer having 10 years professional experience in the oil industry? Please advice.
DR, Doha
A: Termination of employment contract by the employer during annual vacation of the employee is not legally valid. Article 85 prohibits termination of the employment contract or issuing termination notification during any of the periods of leave.
Regarding loan repayment, the debtor may delegate someone by granting a power of attorney to make settlement with the bank on his behalf and to get clearance from the bank.
Qatar Labour Law does not provide any guideline on minimum salary structure for any category of employment.
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LEGAL SYSTEM IN QATAR
If the insured deliberately fails to give such notice or if he concludes such insurances with a view to acquiring an illegal profit, the insurance shall be null and void. If the insurer is unaware of the invalidity of the contract at the time of concluding it, it shall be entitled to receive the insurance premiums to the end of the period during which it was aware of such invalidity.
If there are several insurance contracts in respect of a single item or a single interest without any intent of fraud, whether they take place on a single, date or on different dates, at amounts the total of which are in excess of the value of the insured item or interest, each insurer shall be liable to pay a part of the compensation equivalent to the proportion of the insured amount to the total amount of the insurances but the total amount reinsured shall not exceed the value of the damages suffered by him.
If one of the insurers is declared insolvent, the others shall assume his share each pro rata the insurance amount assumed, provided that the total payments to be made by them shall not exceed the amount for which he took the insurance. These provisions may be violated by a special condition to be indicated in the policy stipulating the division of the liability between the insurers on the basis of priority of dates.
According to Article 794, the insurer shall on the ground of compensation paid for the claims that the insured may have legally replaced the person who is legally liable for the insured damages unless the person responsible for such damage is a relative or an in-law of the insured sharing with him the same household or a person for whose acts the insured is liable. The insurer shall be discharged of liability towards the insured for all or some of the insured amount if its novation becomes impossible due to a reason attributed to the insured.
Rights and obligations arising from an insurance contract shall be transferred to whoever acquires title to the insured property upon disposal thereof. In case of the insured’s death, such rights and obligations shall be transferred to his heirs subject to complying with the inheritance provisions.
However, the insurer and the persons to whom title has been transferred or have acquired title by way of inheritance may unilaterally terminate the contract.
Then, the insurer shall have the right to exercise its right of termination within 30 days from the date on which it is notified of the action causing the transfer of ownership or the death of the insured.
Every condition whereby the insurer becomes entitled to compensation if the person to whom title or ownership of the insured property is transferred opts for termination of the contract shall be null and void.