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Wednesday , November 25 2020

Low pay contract offer

I had signed a contract with my current employer back in February 2012 and then the employer made me sign another offer which paid less on April 30, 2012 without informing me of the change (basically they picked the offer they wanted me to go with). I completed my 6th year of employment with the company on April 30, 2018.

As of July 28, 2018, I received an offer from my employer which is breaking my current contract and I will not accept as the compensation is way less than what I’m currently entitled to.

My question is what will I be entitled to if I don’t accept the low pay contract. Will my employer have to pay me the 3 months severance pay?

Should the housing and transportation allowance be included in the severance pay?

How should my indemnity be calculated for six years of employment?

Does my employer have to cancel my work visa right away?

Name withheld

Answer: If as you say you won’t accept the new contract, (which you have the right to reject) then you may have to put in a formal resignation but in accordance with the Labour Law which requires you to give the company a three-month notice period before ending your relationship with them.

On the other hand if the company on their own initiative decides to fire you, then they are also required to give you the mandatory three month notice period.

If they fail to do that then the law requires them to compensate you with a three-month severance pay in addition to your indemnity which must include monetary compensation for unused leave days. The housing and transportation allowance must be included in the severance pay.

For the six years you have worked for the company your indemnity will be calculated as follows: 15 days pay for each of the first five years of service = 75 days pay but these 75 days have to be first divided by 26 (working days in a month) = 2.88 months pay.

One month pay for every year after the first five years = 1 month pay. Total = 2.88+1 = 3.88 month salary. As your service is over 5 years but less than 10 years you will get two-thirds of 3.88 months salary if you resign. On the other hand if the company fires you, you will get all the 3.88 months salary.

Please also note that the indemnity is calculated taking into consideration the latest remuneration which means the basic salary in addition to all allowances you receive on a regular basis.

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