By Nizar Kochery/Doha


Question: I have received a termination letter from my employer citing the company’s financial deterioration as a reason for ending my contract. The letter further says no gratuity will be given due to financial loss of the company as stated in Article 61 (2). Please advise on Article 61 and on what basis a worker is denied his gratuity payment?
ARP, Doha

Answer: Applicability of Article 61 (2) is limited to financial losses of the employer due to wrongdoing and negligent acts of the employee and not extended to other business losses of the employer.  Article 61 states 10 specific reasons where the employee will not be eligible to receive gratuity benefit. Also as per provisions of sponsorship law, reentry ban for a period of four years will be imposed if no appeal has been made against such a termination before the concerned courts or the appeal has been made but rejected thereafter.

The reasons stipulated are:
1) if the employee is found impersonating other nationalities, has submitted false certification; 2) the employee has committed a mistake that has resulted in gross financial losses for the employer and provided that the employer has informed the Department of Labour before the end of the next working day, from the time that the mistake had occurred; 3) the employee violates more than once, instructions related to the safety or other employees and the establishment, despite being issued a written warning earlier and provided that these instructions are written and displayed prominently inside the establishment at a place where it can be easily accessed; 4) the employee violates more than once the commitments stated in the contract and in the law, despite being warned in writing earlier; 5) the employee divulges vital secrets of the organisation; 6) the employee is found intoxicated with alcohol or under the influence of narcotics while on duty; 7) the employee physically assaults the employer or other officials and seniors while on duty or due to work related disputes the employee; 8) repeatedly assaults his colleagues while on duty and was served written warnings; 9) the employee was absent without justified reasons for more than seven consecutive days or 15 days in one year; and 10) the employee is found guilty in a court verdict in a crime related to his personal honour.

Liability for crime and punishment
Q: Will I be liable for punishment if I knew of a plan to commit a crime and did not inform police about it? If I am a relative of the person planning such a thing will I be excused? If a crime occurs not because of the plan, am I still punishable? Please advise.
GT, Doha

A: Article 186 of the Qatar criminal law stipulates that a penalty of imprisonment for a period of not exceeding three years and a fine not exceeding QR10,000 or one of the two penalties shall apply to anyone who knows about the perpetration of a crime or the existence of a plan to perpetrate an offence in sufficient time to prevent the commission of the crime and abstains without valid excuse to inform the relevant authorities. The said judgment shall not apply to the spouse of the perpetrator, his ascendants or descendants.
Regarding the second part, a person shall not be liable for a crime that did not result because of his criminal activity; however such person shall be liable for that crime if his criminal activity led to the occurrence thereof accompanied by another previous, current or subsequent reason if such reason can reasonably be expected or foreseen. However if reason alone was adequate for the crime to occur, the person shall not be liable for the crime in such a case but shall be liable for whatever action was committed by him.

Tax for service outside Qatar
Q: Please advise on the tax rates in Qatar. What tax should we deduct when we take service from a company not present in Qatar? We are a new IT company and are required to engage consultants outside Qatar.
AD, Doha

A: The tax rate shall be 10% of the taxable income during the taxable year. Payments made to non-residents with respect to activities not connected with a permanent establishment in Qatar shall be subject to a final withholding tax @5% of the gross amount of royalties and technical fees; and @7% of the gross amount of interest, commissions, brokerage fees, director’s fees, attendance fees and any other payments for services carried out wholly or partly in Qatar. Permanent establishment is defined as a fixed place of business through which the business of a taxpayer is wholly or partially carried on. A technical fee includes payments against managerial or technical or consultancy services. Payments of any kind made as consideration for the use of copyright, trademark, etc. comes under royalties. Due consideration will be given to tax agreements and treaties.

♦ Please send your questions by e-mail: leges@qatar.net.qa


LEGAL SYSTEM IN QATAR
Article 1171 stipulates that a privilege cannot be set up against the holder in good faith of a movable. A lessor of an immovable and an hotel operator are deemed, in so far as this article applies, to be holders of furniture used in the leased premises and of effects brought into the hotels by travellers respectively. If a creditor has reasonable grounds to apprehend that movables charged with a privilege in his favour will be misappropriated, he may apply for them to be placed in judicial custody.
Provisions applying to loss or destruction of mortgaged property shall also apply to privileges. In the absence of a provision of the law to the contrary, privileges are extinguished in the same way and in accordance with the same rules as a mortgage or a pledge to the extent that such rules do not conflict with the nature of a privilege.
In addition to the privileges established by special provisions of the law, the following rights are privileged:
(a) Costs of legal proceedings incurred, in the common interest of all the creditors, for the preservation and sale of the property of the debtor, have a privilege over the price of such property. Such costs are payable in priority to any other claim, whether privileged or secured by mortgage. Also, costs incurred for the sale of the property are payable in priority to the costs of the procedure of distribution.
(b) Sums due to the Public Treasury for taxes, duties and other dues of any kind are privileged in accordance with the conditions laid down by laws and regulations issued in this connection. Such sums shall be paid out of the proceeds of sale of the property charged with this privilege, in whosoever’s hands it may be, and before all other rights, whether privileged or secured by a mortgage, except costs of legal proceedings.
(c) Sums incurred for the preservation of, and repairs of a necessary kind to, a movable are secured by a privilege over the movable as a whole. Such sums shall be paid out of the proceeds of sale of the property so charged, and rank immediately after the costs of legal proceedings and sums due to the Public Treasury. As between them such expenses will rank in the inverse order of the dates on which they were incurred.
According to Article 1178, the following claims are secured by a privilege to the extent of their amounts due during the last six months over the entire debtor’s property, whether movable or immovable:
(a) sums due to servants, workers and other wage earners for wages and emoluments of any kind due to them.
(b) sums due for foodstuffs and clothes supplied to the debtor and to persons depending on him. (c) alimony due by the debtor to his dependents.
These claims rank immediately after the costs of legal proceedings, sums due to the Public Treasury and expenses for the preservation of and repair to the property. As between them such claims are paid rateably.