Employers may extend loans to their employees, but they must adhere to specific legal guidelines. According to Article 25 of the UAE Labour Law, loans provided by employers to workers must be interest-free. Additionally, any loan repayment deductions from the worker’s wage must not exceed the maximum monthly deduction rate stipulated in the Labour Law and must be made with the worker's written consent. This ensures fairness and prevents exploitation in financial dealings between employers and employees.

When it comes to disciplinary actions, Article 39 of the Labour Law outlines the permissible penalties that employers may impose on employees for misconduct. These include written cautions or warnings, wage deductions not exceeding five days’ pay per month, suspension without pay for up to 14 days, deprivation of periodic raises for up to a year, or denial of promotion for up to two years in companies with promotion systems. In severe cases, dismissal from service is allowed, provided the employee’s right to end-of-service gratuity is preserved. Employers are required to maintain a clear schedule of penalties within the organization, ensuring transparency and compliance with legal norms.

Interestingly, employers are not legally required to inform the Ministry of Labour when imposing penalties on employees, as these matters fall under the company’s internal policies. However, employees retain the right to challenge such penalties by filing a labour complaint or grievance with the establishment’s management. This safeguard ensures that employees have recourse in case of unfair disciplinary actions.

Employers and employees alike must understand these provisions to maintain a balanced and legally compliant workplace environment. Following the stipulated regulations fosters trust and prevents disputes, ensuring a harmonious professional relationship.