Financial Fraud by an Employee in the UAE
Sankalp Surana
- at Labour And Immigration
- on May 25, 2022 - 14:45
- on Updated: May 25, 2022 - 15:07
Financial fraud is a situation where a person has deprived you of your money through misappropriation or other illegal practices.
Misappropriation is defined as the act of stealing something and using it for one’s own personal gain, usually money. The term misappropriation is also termed “embezzlement”.
There are three most common types of misappropriation are of funds, assets, and trade secrets.
If an employee has committed misappropriation of funds during the period of his employment, the employer has the following alternatives to take action against such misappropriation.
Criminal Procedures Code -
The UAE law regards misappropriation of funds by an employee as fraud, which is criminal in nature as the company’s funds are used by the employee for personal gain. Employers can file for criminal proceedings and seek compensation for their losses or damages.
According to Article 22, Federal Law No.35/1992 Concerning the Criminal Procedural Law “Whoever sustained a direct personal prejudice from the crime is entitled to claim from the accused his civil rights during the gathering of evidence, proceeding with the investigation or before the court examining the criminal case, at any stage of trial up to the close of the oral pleadings but he is not entitled to do so before the appellate court. In case the prejudice is sustained by a juristic person, the court must Ipso Jure adjudicate damages if they are specified by law or in a regulation issued under the law.”
The Dubai Financial Fraud Law-
Dubai Law No. 37 of 2009 relates to Procedures for the Recovery of Illegally obtained Public and Private Funds (The Dubai Financial Fraud Law ). To deter those who commit fraud from refusing to return the proceeds of their crimes Dubai Law No. 37 was passed with the objective of restoring justice to the victims of fraud.
Article 1 gives clear definitions of illegitimate funds and public funds.
Article 2 states that if a final judgment is issued proving that a person obtained illegitimate funds as defined in Article 1 and fails to repay the money for any reason, the enforcement Judge must, upon the request of the debtor (i.e. civil claimant/victim), order the debtor (fraudster) to be imprisoned for:
- For a period of five years if the illegitimate funds obtained are not less than AED500,000 and not more than AED.
- A ten-year term if the illegal monies gained is greater than AED1,000,000 but less than AED5,000,000.
- For a period of 15 years if the unlawful monies gained a total of more than AED5,000,000 but less than AED10,000,000.
- A 20-year period if the illegal monies collected total more than AED10,000,000.
Article 3 clearly specifies that the duration of imprisonment applicable in Article 2 is equally applicable if the monies are regarded to be public funds, in a progressive step that removes the distinction between public and private businesses that have been created.
Article 4 states that neglecting to refund stolen funds carries a penalty in addition to the punishment for committing the offense that resulted in the illegal cash.
Labour Law-
According to Article 44 of the UAE Labour Code, an employer can suspend a worker without any notice if the fault of the employee has resulted in a considerable loss for the employer.
The UAE law regards misappropriation of funds by an employee as fraud, which is criminal in nature as the company’s funds are used by the employee for personal gain.
A complaint can be filed to MOHRE asking for termination. The employer must then get the approval of the Labour Office and the incident has to be reported within 48 hours.
A written investigation must be done and a warning has to be issued if such an incident is repeated.
When the dismissal decision is issued in legal form, it is to be shown in the lawsuit and a request has to be made to give it the legal effect.
Thus an employer can register a criminal case and labor case against the employee but the labor proceedings will be on hold once a criminal case is registered. Ultimately when the employer gets a judgment in a criminal case against the employee, the employee will not be entitled to claim any benefits.
For any legal queries or information, contact info@thelawreporters.com or call us on +971547928720
Popular Posts
Related News
Saudi Arabia to welcome more pilgrims
Starting August 9, Saudi Arabia will be welcoming Umrah, receiving Umrah pilgrimage requests from abroad for vaccinated pilgrims. After over a year of not being able to receive pilgrims, Makkah, Madinah will be estimated to allow approximate two million pilgrims whilst maintaining the necessary Covid-19 precautionary measures. The pilgrims will be required to include their respective authorised Covid-19...
- By, Sunil Ambalavelil
- Share
Work Permits Available under the New Labour Law in UAE
By Arjav Sony The Ministry of Human Resources and Emiratisation (MoHRE), announced to issue 12 work permits for both national and international residents. MoHRE announced that the work permits will be introduced under the new Labour law- Federal Decree-Law No.33 of 2021. MoHRE released the guidelines mentioned in the new labour law in November 2021. However, the law came into force on 2 February...
- By, arjav_sony
- Share
New UAE Labour Laws Will Facilitate New Opportunities,...
Without a doubt, the world as we know it, has changed with growing uncertainty of the pandemic. Our economy has changed, and workplaces have changed with offices moving into our homes. New businesses were bearing the brunt of the pandemic. To alleviate their distress, President Sheikh Khalifa, announced changes to existing labour laws, for the first time since 1980. The UAE Ministry of Human Resources...
- By, Sunil Ambalavelil
- Share
Travel Ban on Children: Shifts in the Travel Ban Laws
Travel bans restrain individuals from moving beyond the territory of the country without satisfying the necessary conditions are fulfilled. This article elucidates on the travel ban on the child, where the child’s name shall be listed at all entry points to the UAE, such as ports, borders connecting the neighboring countries and airport to prevent the child from leaving the territory. As per...
- By, Sunil Ambalavelil
- Share
MoHRE Forms Committee To Address Labour Grievances
In view to assess labour relations grievances presented by parties based on relevant resolutions issued by the ministry, the Ministry of Human Resources and Emiratisation has issued a resolution to form a committee. This move is in implementation of a Federal Decree Law to regulate labour relations, ensure transparency and integrity in addressing the grievances of employers and employees, and provide...
- By, Sunil Ambalavelil
- Share
Labour Ban – When and Why Employers Apply for this?
By Arjav Sony Certain times an employee may not have desirable corporate behavior and employers will have to take measures to retain high working standards of human resource in the UAE. A Labour Ban is consulted for after careful consideration if an employee’s corporate ethics do not meet the standards. What is Labour Ban? A labour ban is the act of restricting skilled or unskilled employees...
- By, Sunil Ambalavelil
- Share