(MENAFN- Khaleej Times)
Published: Wed 26 Jun 2024, 6:00 AM
Last updated: Wed 26 Jun 2024, 7:07 AM
Four months into his job, Dubai resident Syed Pasha faced a double blow - he was terminated during probation period and then denied job loss insurance claim. Instead, an oversight by his employer left him grappling with uncertainty and financial distress.
As a subscriber to the Involuntary Loss of Employment (ILOE) scheme, Syed had hoped the insurance would support him for the next few months. Under the scheme, subscribed individuals are entitled to up to 60% of their average basic salary from the six months prior to job loss. Eligible employees who have paid the monthly premium for at least 12 consecutive months will receive this cash benefit for a maximum of three consecutive months.
One mistake by an individual or a company can deprive an employee of job loss benefits , causing them to miss out on the monthly cash support that the insurance promises.
Employer's oversight
“As if the shock of losing a well-paid job was not enough, I was informed of a discrepancy, and hence, I was not eligible for the benefits. I felt helpless, not knowing where to turn for a solution,” Syed told Khaleej Times, expressing the frustration he felt.
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The Indian expat said, "The company's letter to me stated it was a termination, whereas the employment cancellation letter to the Ministry of Human Resources and Emiratisation (Mohre) showed that I had resigned. It was an oversight by the company during my visa/labour cancellation submission, which I had signed."
Struggling to clarify the discrepancy, Syed went back and forth between his company and ILOE, managed by Dubai Insurance, seeking a solution to this conundrum.
"ILOE informed me that Mohre's record superseded the company's termination letter, meaning my claim will be rejected. I desperately needed the money to remain in the country and search for another job. I contacted the company, but there was no clear way to proceed, and nobody seemed to know what to do."
The company admitted their inadvertent mistake and tried to help Syed, contacting Mohre and Tasheel to resolve the situation. Here's a copy of the email they sent ILOE, stating the confusion and providing supporting documents:
Firms risk legal action
In a statement to Khaleej Times, Mohre urged private sector companies to provide accurate data when terminating employees to avoid irregularities and legal action.
"Mohre is able to detect anomalies and take action against employers who fail to provide accurate information. This, in turn, enables employees to receive the maximum benefit from the Unemployment Insurance Scheme, provided they meet the required conditions, which includes not having resigned from their post voluntarily or been dismissed for disciplinary reasons."
The Ministry said that any discrepancy between the actual reason for ending employment and the information provided to the Ministry would be regarded as the company providing false information, which would result in an investigation and could lead to legal action against the company. If the violation is confirmed, a fine will be imposed on the company before the firm is referred to the Public Prosecution to complete the penal procedures.
Understanding the relatively new ILOE process can be challenging for employers and employees alike. Sara Khoja, Partner at Clyde and Co, a Dubai-based law firm, explained, "The ILOE is a new scheme and as such employees and employers are still becoming familiar with its requirements and the process for claiming unemployment benefit. The scheme was introduced in 2023 and required the individual to have contributed for a minimum period of 12 months.
"Moreover, employees can only claim the benefit if their visa has been cancelled and the reason for termination is not attributable to the employee himself (e.g. resignation). It is, therefore, important for the employer and the employee to set out information consistent with this position to enable the individual to claim the benefit."
In Syed's case, it took several calls and email exchanges with various authorities but, with the 30-day deadline close to expiry, Syed finally received welcome news from ILOE. After careful review of his case, they'd approved the claim (screenshot below):
How to resolve accidental errors
In the event of unintentional errors in entering the reason for a worker's termination, which would have prevented said worker from receiving unemployment compensation, Mohre clarified that there is no need for the worker to file a labour complaint or request technical support to amend the cancellation document.
"In such cases, it suffices to provide the termination letter, where it states clearly that the company initiated the worker's termination and attach that letter to the compensation request submitted through the Unemployment Insurance Scheme portal."
To make the process seamless, Sara advised employers to "consult with ILOE prior to filing any visa cancellation applications as to their requirements for each employee to ensure that the employee will not be impacted when claiming compensation. Simultaneously, before submitting any application to Mohre, employers should flag that the individual intends to claim insurance under this scheme as the Mohre officials can also advise accordingly."
The Ministry also urged employers and workers to examine information and guidelines about the scheme, available on the Insurance Pool website , or by contacting the call centre at 600599555 to inquire about any procedure related to subscription and compensation.
Finally, in the event that the worker is facing challenges claiming insurance from ILOE, the worker can escalate the request to the Ministry which will investigate the case and enforce a resolution.
Benefits and eligibility
The unemployment insurance scheme is divided into two categories:
The first covers those with a basic salary of Dh16,000 or below, where the insurance premium is set at Dh5 per month, and the maximum monthly compensation at Dh10,000.
The second category includes those with a basic salary exceeding Dh16,000, where the insurance premium is Dh10 per month and the monthly compensation is capped at Dh20,000.
The insurance compensation can be claimed as long as the employee has been subscribed to the scheme for at least 12 consecutive months. The claim will be processed within two weeks of submission. The employee will not get compensation if he/she cancels residency and leaves the country or takes up a new job.
The compensation is paid for a maximum of three months from the date of unemployment for each claim, provided the employee in question was not terminated for disciplinary reasons, and did not resign.
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