Gratuity calculation under UAE labour law 2011 2012
There have been tonnes of questions, debates and doubts in the minds of several people when it comes to Gratuity Calculation under UAE Labour Law. I have talked to few well-known HR figures in Dubai and here is the feedback received from most of them:
There are 2 scenarios:
- You resign from your job
- You are fired from your job.
- IF YOU RESIGN: As per the UAE Federal Government Labour Law, the Article 132 stipulates that if a worker who has completed more than one year of continuous employment in a company, then he is entitled for 21 calendar days’ remuneration(End Of Service Benefits or Gratuity) for every year that he has worked. The days of absence from work without pay are not included in calculating the period of service. If the employee has a continuous employment of more than 5 years, then he is eligible for a remuneration of 30 days’ for the number of years that he has been employed provided the aggregate amount of severance pay shall not exceed 2 years’ remuneration.
- IF YOU ARE FIRED: If you are fired, in addition to the above the company MAY pay you ‘n’ number of salaries for the ‘n’ number of years that you have spent with them maximum upto 3 monthly salaries. For Example: if you have been in the company for 5 years you may get an additional 3 months’ salary. (This depends from company to company. My company was kind enough and I was paid 3 salaries in addition to the EOSB).
If you have taken any salary advances for House rent or other purposes, these will be settled with your EOSB. If the advances that you have taken exceed the EOSB package, then you might need to make good the outstanding. These rules are applicable to the companies under the Ministry of Labour. Most of the Freezones follow these rules or they have similar set of rules, but they might differ.
If you have any other version please let others know in your comments. You can read the UAE Labour Law here.
So here it is. This is just a guide to Gratuity Calculation under UAE Labour Law(End of Service Benefits). These rules keep changing and you are required to keep your ears and eyes open for any announcements from the Ministry of Labour.