Can Your Employer Deduct Your Gratuity or End of Service Payments as per the New UAE Labour Law?

As per the UAE Labour Law, if you resigned or terminated, you are normally entitled to end of service benefits . However, according to a new Cabinet Resolution issued by the Ministry of Human Resources and Emiratisation (MOHRE) in certain cases your employer may deduct an amount from your gratuity or end of service benefit.

As per the Article 51 (7) of the Federal Decree Law No 33 of 2021 :

The employer may deduct from the end of service benefits any amounts payable under the law or a judgment, in accordance with the conditions and procedures specified in the Implementing Regulation hereof.

As per the Article 29 of Cabinet Resolution No 1 of 2022, Employer may deduct the End of Service Benefits or gratuity of Workers in below cases:

Subject to the provisions of Clause (7) of Article (51) of the Decree-Law:

1. The employer may deduct from the worker’s end-of-service benefit any amounts that are due legally or by judicial ruling, pursuant to the following conditions and procedures:

• The amounts owed by the worker to recover loans or overpayment.
• To recover the amounts that were supposed to be paid by the workers as a contribution to the end of service, retirement pensions or insurance, in accordance with the legislation in force in the State.
• As amounts deducted from the worker for violations he commits according to the regulation of penalties applicable at the establishment and approved by the Ministry.
• As debts owed in implementation of a court ruling issued against the worker.
• As amounts for repairing damage caused by the worker, due to his fault or to his violation of the employer’s instructions and that led to the damage, destruction or loss of tools, machines, products or materials owned by the employer.

2. The employer shall have followed the procedures set out in the Decree-Law and in this Resolution when the deducted amounts involve violations committed by the worker or are a result of damage caused by his fault, and not more than three months shall have lapsed from the due date of such amounts unless otherwise agreed.