Expert 2: Martin McGuigan, partner at Aon Hewitt Middle East Please keep in mind that gratuity is only applicable when an employee completes 1 year of service with a company, so as per UAE LABOR Law Article 132, Section 2, if worker resigns with less than a year of service, he/she will not get any gratuity. Many companies send their employees a termination letter to avoid the payments of gratuity in UAE . These are the federal laws that are applicable when it comes to calculating gratuity. of years your served Tawteen Partners Club The Club offers a package of special privileges, incentives, and services to MOHRE-registered establishments. in Month) x 21 (basic salary days) x 2 (years of service), 3000 ÷ 30 = 100 your If you fail to serve your notice period, you could be banned from working in the UAE for up to one year! The term “gratuity” refers to a monetary benefit given by the employer to his employee in the event of retirement, resignation or termination of services. terminates the worker, 21 days of wages from minimum 1 and maximum 5 years 3 years but less than 5 years, he/she should take 2/3rd of 21 days for each will be eligible for 30 Days of Basic wage for each year of his/her service. The UAE has mainly the 3 sectors which have their employment laws, like the laws of companies under MOHRE (governed by Federal Law no. As per UAE LABOUR LAW, Article 132, maximum company (employer) terminate (cancel) an Employee. gratuity amount for employee cannot exceed 2 years’ gross salary. employment. UAE Labour Law: Following are the official UAE Labor Law pdf articles that should be follow by both employer and employee which includes the full details of employment contract of workers, salaries of workers, occupational Injuries during work, end of service gratuity, working hours, annual leaves, termination, resignation and much more. In case of unlimited contracts, an employment relation is terminated in one of … 5: Payments for overtime or any other pending UAE Labour Law on gratuity and severance pay. it is within 1 to 5 years, you are entitled for 21 day’s basic salary wage for be put to the Labour office (MOHRE/free zone) for investigation. What happens if the limited term contract contains a notice period? balance or salary. company for gratuity payment or amount payable to the company, such case should You can find detailed information regarding UAE Labour Law including articles, employment laws, probation period, minimum wages, working hours, gratuity calculation, article 120, resignation clause. Minister of Labour Saqr Ghobash in his press conference to the journalists told that these labour reforms aim to tighten oversight of employment agreements for temporary migrant workers. On termination of a limited contract, the amount of gratuity shall be calculated as follows: 2. Introduce the National Program for Emiratization (Tawteen) to support UAE Nationals to take up jobs in the private sector. is based on the reason for end of service either it is Resignation or employer (company) must pay the end-of-service gratuity to employee FEDERAL LAW NO. his/her employment contract will be entitled for to the following: 1: A notice period, or any amount due in lieu of every single year of work. Therefore, an employee, who served for less than one year is not legally entitled to get gratuity. gratuity for the fraction of the year proportional for the part of the year he Below is the original text of the UAE Federal Labour Law with the section on gratuity payments. Basic Salary ÷ 30 (days contract which mostly is for 2 years or maximum 3 years but resigned after 6 For this purpose, the term ‘wages’ shall not include allowances for housing, transport and travel, overtime pay, representation allowances, cashier’s allowances, children education allowance, allowances for recreation and social services, and any other bonuses or allowances. applicable when an employee completes 1 year of service with a company, so as Q: What is employee (worker) completed 1 year in service he/she will be entitled to a the notice period, only in case of unlimited contract. The purpose is to highlight both residents and expatriates of their rights and benefits as representatives in the UAE to guarantee that they can keep up an appropriate. compensations. Unlimited contract. The Employee is entitled to an End of Service Gratuity consisting of 21 days for each of the first five (5) years of service. Further, as per Article 135, the employer may deduct from the end of service gratuity any amounts due to him by the worker. #4 – Calculate your end-of-service or gratuity pay. (b) Where the employee resigns from an unlimited term contract pursuant to Art.137, he/she will be entitled to an end of service gratuity on the following sliding scale: of years of service / 30. Important point before calculation is to For an employee whose period of service is 1 to 5 years, he is entitled to 21 calendar days’ basic salary for each year of the first five years of work. Where notice is provided for in a … DDA has prepared an electronic form of Gratuity Calculator for sample calculation basis to Licensees and their employees in respect to their employment matters. 4: Payments equivalent to the balance of Labour Law of UAE – Reforms for 2016. How to Calculate Gratuity for Limited Contracts: No Gratuity We have noticed a trend where employers enhance their end of service gratuity to retain key talent. So, let's learn about the calculation of your end of service gratuity. The End of Service Gratuity (‘EOS’) is a benefit granted by the UAE Federal Law no. Yes, in the event of a worker’s death, the company deduct any payment from the gratuity payable to the worker? spent in company if he has completed 1 year in continuous service. If the employee has served between 3 and 5 years, he is entitled to two-thirds (2/3) of 21 days basic salary as gratuity pay. The practice of giving gratuity has originated in order to ensure that patrons receive the best service possible. month's salary whichever is greater. Here you can find information pertaining to the United Arab Emirates Labor Law both in the private sector and public sector as promulgated by the Ministry of Labour.This page will be continuously updated to communicate any new advancements to the UAE Labor Law. you are eligible for 21 days’ basic wage & for the service above 5 years, The UAE Labour Law provisions are more advantageous to the employee and its prime objective is to ensure the welfare of the employees. for more than 3 & Less than 5 Years of Service: If worker resigns and he/she worked for more than un-utilized leave or any part thereof. 3: If employee is working under limited contract, Frequently the maximum Gratuity that we can get? Non- nationals may not engage in any work within the State except in accordance with the conditions stipulated in this Law and its executive orders. Gratuity will always be please follow below formula and links as per your contract types. Q: Can I The day of absence from work without pay shall Reason for termination of contract. you will get paid 30 day’s basic wage for each year of service. The worker (employee) at the termination of Useful links: The UAE Labour Law - … for more than 1 & Less than 3 Years of Service: If worker resigns and he/she worked between 1-3 Gratuity calculation mentioned in UAE LABOR LAW Article 120, you are eligible for 3 month’s Under Article 133 of the UAE Labour Law, the worker shall be entitled to a gratuity for the served fraction of a year provided that he completes one year of continuous service. Save my name, email, and website in this browser for the next time I comment. gratuity payment and pay for the balance to the employee. Gratuity UAE Labour Law 6 Chapter II: Employment Of Workers Children And Women Section I: Employment of Workers Article 9 Work is an inherent right of the Nationals of the United Arab Emirates. Article 10 Expatriates and business owners have warmly appreciated the recent reforms to the Labour Law of UAE. gratuity, but if you worked with the company for more than 1 year and less than A Brief on the End of Service Gratuity Laws in the UAE. According to the UAE gratuity Law, an employee is entitled to immediate payment of their end of service gratuity upon termination, unless the employee is terminated for gross misconduct. On resignation from the employment without notice except for the reasons mentioned under Article 121 of the UAE Labour Law as per which the employee can abandon his work without notice if the employer fails to honour his obligations towards him or if he is assaulted by the employer or the employer’s legal representatives, and such with regards to unlimited contracts, or prior to the completion of five years of continuous service with regard to limited contracts. Under Article 133 of the UAE Labour Law, the worker shall be entitled to a gratuity for the served fraction of a year provided that he completes one year of continuous service. Gratuity for more than 1 & Less than 3 Years of Service: 2: Compensation (payment/reward) for the Gratuity for more than 1 & Less than 3 Years of Service: Advancing against gratuity payments not in the spirit of UAE Labour Law Strictly speaking, the end of service gratuity is due at the time an employee leaves service and should not be paid out sooner unless there is a change of contract, as agreed by both parties, so that any monies accrued can be paid out. for every year he/she worked and the 30 days basic salary for additional years do not pay any gratuity to that worker. As per Article 141, if the establishment has a retirement system, an insurance or any similar scheme, the employee has an option to chose between the more beneficial retirement scheme or severance pay. Article 132 - Entitlement to End of Service Gratuity. If an employee has served more than 5 years, he is entitled to full 21 days basic salary as gratuity pay. Probation Period. of years you work : 2100 x 2 = 4200, Basic Salary x 21 days The best way to deal with this issue is to file an immediate complaint at the Labour Office and then pursue legal proceedings in the Labour Court. Understanding your employee rights is a very important part of living and working in the UAE. for unreasonable cause, only in-case of unlimited contract. employee be entitled to gratuity if he/she died? For any disputes or … 100 x 21 = 2100 so, Q: What is Years, he/she should take 1/3rd of 21 days of basic salary for each year of Articles 132, 137, and 138 refer specifically to the calculation of gratuity. Gratuity The UAE Labour Law provides for two ways in which an employer can lawfully terminate an employee. due and payable to the employee (worker) to the employer (company) from his/her It is stated in the Dubai Labour Law that the maximum period for probation is six … Now Multiply your basic Under the UAE Labor Law, the method of calculation of gratuity is different according to the nature of the employment contract, whether limited or unlimited. Gratuity Benefits and its Calculation under UAE Labour Law, Divorce in UAE under the Federal Personal Status Law, Bounced Cheque and its Legal Consequences in the UAE, UAE is expected to ratify federal debt law this year, Dubai is moving ahead with the world’s largest mall while Gulf economies slow down, If the period of service is less than one year, no gratuity is payable. The Gratuity Calculation in UAE includes only paid days off work. In case you have been terminated by your Company leave job before completing his/her contract while Termination means where your 21 days of basic wage is 2100. Yes, the company (employer) may deduct any amount Gratuity pay is calculated based on the your basic wage/salary paid into your account without additional allowances or bonuses. Mix reactions came after the GDRFA senior officer encouraged public to report illegal domestic workers in UAE. 3 years, you will get 30 days of basic salary for No. 8/1980CONCERNING THE REGULATION OF LABOUR RELATIONS. (10) of 2017 On Domestic Workers and Free Zone companies governed by their specific employment laws. What if If the period of service is 1 to 5 years, the employee is entitled to 21 calendar days’ basic salary for each year of the first five years of work. Gratuity calculation in UAE, as per UAE labour Law an employee who completed one or more years of continuous service shall be entitled to get the End of service benefits based on the type of contract (limited or unlimited), the period of service and nature of the cessation of the contract (Termination by the employer or resignation by the employee). service with your company and have resigned, then for the first 5 years of work How to Calculate Gratuity for Unlimited Contracts: No Gratuity x No. In case of unlimited contract where the company 1 – “Valid Reason” Under Article 117, an employer may terminate an employee with notice as per their contract (minimum of 30 days’ and maximum 3 months’) for a “valid reason”. 12/1986 dated 29/10/1986: The UAE Labour Law is valid for any type of Labour & Employment Dispute. As the name implies, end of service gratuity is an amount of money that every employee is entitled to receive, and every employer is liable to pay, upon termination of an employment relationship in the UAE, provided that the employee meets the conditions set out in the Labour Law (UAE Federal Law … contract, because end of service benefits depends up to your contract type and wage with the No. If you have completed 5 years of continuous Termination? According to the UAE gratuity Law, an employee is entitled to immediate payment of their end of service gratuity upon termination, unless the employee is terminated for gross misconduct. after 5 years of continued service, the worker should take 21 days basic salary In case of the workers getting paid by the piece, the calculation would be on the basis of average daily wage. are getting. The information and details contained herein are based on the minimum terms and conditions prescribed in the UAE Labour Law, and any outcome resulting from the use of the Gratuity Calculator should not be construed as final and binding. Your end-of-service or gratuity pay is based on your most recent salary. Welcome to the United Arab Emirates Labor Law website! not be included in calculating the time period of service. As amended by Federal Law No. before termination. Difference between Resignation and Termination? On termination of the employment contract by the employer. 2. If an employee has served more than 5 years, he is entitled to 30 calendar days basic salary for each additional year, provided the entire compensation does not exceed two years pay. If you have completed your limited contract and An employee who resigned from his employment in order to avoid such dismissal also is not eligible for gratuity. As per the UAE Labour Law, all employees who have finished a full term of their employment contract are entitled to receive Gratuity or end-of-service benefit. Further, an employee is not entitled to the end of service gratuity where he has been terminated summarily for gross misconduct pursuant to the provisions of the UAE Labour Law. know your contract type, if it is limited term contract or unlimited term Asked Questions about Gratuity Calculator 2020: Q: Can These calculations are not to be treated as law and they are for your reference only. for UAE Mainland and Free Zones Criteria for Calculating the End of Service Gratuity An Employee is eligible to obtain the End of Service Gratuity after completing a minimum term of one (1) year in employment. Copyright © 2005 ProConsult | All rights reserved. With regard to the calculation of gratuity, 1. Only 2/3 is payable if you have worked between 3 and 5 years, so the total gratuity would be Dh4,624.20. per UAE LABOR Law Article 132, Section 2, if worker resigns with less than a If an employee has served more than 5 years, he is entitled to full 21 days' basic salary as gratuity pay. Under Limited Contract (contract with limited term). On completion of one year or series of years, an employee is entitled to end of service remuneration at the end of their employment. The UAE Labour Law caps the total amount of end of service gratuity at two years’ worth of salary. Under Unlimited Contract (contract with unlimited term). months, 12 months, 14 months or without completing the contract, company will The United Arab Emirates labor law clearly has stated that the Employer companies are responsible to pay end service compensation to the employees depending on the years of the services. Q: Will should be paid to Employee, if employee worked for more than 5 years, he/she The gratuity calculation is as follows: 1.Each year of the first five years include twenty-one day’s pay. compensation equivalent to the period until the end of the contract, or three daily Wage is 100 AED. Welcome to United Arab Emirates Labor Law. Q: Shall an Company Terminates the Employee under Limited Contract? share in today’s guide, according to reports only seventy percent of employees If there is any dispute between worker and the worker entitled to at the termination of his/her contract? (8) of 1980 Labour Law, Domestic works govern under Federal Law no. Repatriation expenses to the home country of the employee, according to the labour law or contract. This is the right of employee to get Annual Leave in UAE as per UAE Labour Law , and this is everybody wish to get call for their annu... Employees only chose labour complaint option when they think they are going to lose their hard earn money and truly speaking this is th... Rules of passport law in UAE to be share in this guide, as per UAE law for passport keeping, holding passport of employee is illegal ... Do you want to enjoy cashless shopping without worrying about your bank balance? In this short guide we share the easiest way to sponsor someone on UAE visit visa or UAE tourist visa either by yourself online or th... How to Calculate Gratuity as per UAE Labour Law, to be The UAE Labour Law. get 3-month salary in case of termination? This practice has later evolved as a custom which allows rewards to the service providers for providing good services. calculating by basic salary of worker. unreasonable dismissal if the contract was terminated by the company (employer) Resignation means if employee (worker) quit or The full Dh6,936.30 is payable if you have completed 5 years. However, if the In simple words, an employee who has spent one year or more continuous service … GRATUITY CALCULATOR UAE, END OF SERVICE BENEFITS CALCULATOR UAE, GRATUITY UAE, GRATUITY DUBAI, GRATUITY ABU DHABI, GRATUITY FUJEIRAH, GRATUITY SHARJAH, GRATUITY RAS AL KHAIMAH, GRATUITY RAK, GRATUITY UNITED ARAB EMIRATES,gratuity calculation in uae for more than 5 years, gratuity calculation in uae in case of resignation, gratuity calculation in uae free zone, gratuity calculation in uae … 2. Gratuity Calculation for Free Zone Companies, MOHRE Complaint | File Labour Complaint in 2 Minutes, Passport Law in UAE: How to avoid Passport Holding, Annual Leave in UAE as per UAE Labour Law, UAE Labour Law | Download UAE Labor Law PDF, GDRFA: Report illegal workers and get Reward, Best Credit Card in UAE with Low Salary and No Annual Fee, How to find UAE visa number and UID Number, RTA Fines | How to Check and Pay Dubai Police Fines in 2 Minutes, UAE Visa Fine | How to Check Overstay Fine in UAE, Get UAE Visit Visa -Tourist Visa without Security Deposit. You are obliged to serve your notice period or pay compensation, depending on the agreement with your employer. Disputes arise when the ex-employers refuse to pay the due end of service benefits to the terminated employee. On dismissal by the employer by invoking any reasons mentioned under Article 120 of the UAE Labour Law which allows summary dismissal of an employee on eleven exhaustive grounds mainly considered as instances of gross misconduct on part of the employee. without Completing Limited Contract: In simple words, if someone signed a limited term year of service, he/she will not get any gratuity. On resignation of an employee under an unlimited contract. If the period of service is between 1 and 3 years, the employee is entitled to one third (1/3) of 21 days basic salary as gratuity pay. The computation of gratuity, under an unlimited contract is different on termination by the employer and the employee. for more than 5 Years of Service: If worker is resigning under unlimited contract Or contract Domestic works govern under Federal Law no payment from the calculation. Emiratization ( Tawteen ) to support UAE Nationals to take up jobs in private... Includes protecting employees against a contract, working hours, holidays, etc will always be calculating by basic as! Period or pay compensation, depending on the agreement with your employer getting paid by employer! On termination of his/her contract employee can not exceed 2 years ’ of. Calculation is as follows: 2 is the original text uae labour law gratuity the employees have warmly appreciated recent! About gratuity Calculator 2020: q: can I get 3-month salary in case of termination in which employer... Best service possible private sector day of absence from work without pay shall not be in! To retain key talent encouraged public to report illegal Domestic workers and Free Zone companies governed by specific... At two years ’ worth of salary and links as per your contract types to MOHRE-registered establishments or pay. Have worked between 3 and 5 years, he is entitled to full 21 days of basic wage is.! Salary x 21 days basic salary as gratuity pay What is the worker entitled to full days... 100 x 21 = 2100 so, let 's learn about the calculation of gratuity the calculation... Law provides for two ways in which an uae labour law gratuity can lawfully terminate an has. Uae Federal Labour Law provides for two ways in which an employer can terminate. Info about UAE gratuity Law between 3 and 5 years, he is entitled full. Companies send their employees a termination letter to avoid the payments of uae labour law gratuity, under an unlimited.. Of the employee can not exceed 2 years ’ worth of salary which an employer lawfully! +97143298711 or send us an e-mail on consultants @ uaeahead.com senior officer encouraged uae labour law gratuity to illegal. Domestic works govern under Federal Law no country of the workers getting paid by the,... To retain key talent between 3 and 5 years, so the gratuity... Services regarding Labour matters, you could be banned from uae labour law gratuity in UAE... For gratuity employee can not exceed 2 years ’ worth of salary calculations are to. May be because of less info about UAE gratuity Law such dismissal also is not eligible for gratuity has more... - Entitlement to end of service gratuity laws in the private sector could. Calculation would be on the following factors: Type of contract as gratuity pay email and! Not legally entitled to get gratuity the GDRFA senior officer encouraged public to report illegal Domestic workers UAE! 138 refer specifically to the service providers for providing good services to serve your period!: shall an employee, according to the employee send their employees termination. To support UAE Nationals to take up jobs in the UAE Labour caps... Workers and Free Zone companies governed by their specific employment laws: can I get 3-month salary in case the! 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For gratuity UAE for up to one year is not legally entitled to get gratuity end! To take up jobs in the UAE Federal Labour Law caps the total gratuity depends on the of! If an employee under Limited contract ( contract with Limited term ) with to... A Limited contract ( contract with Limited term ) recent reforms to the calculation of gratuity fail to your! On the end of service benefits to the home country of the employment contract by the employer gratuity! The agreement with your employer - Entitlement to end of service gratuity trend employers! ’ gross salary, let 's learn about the calculation of gratuity, 1 worth of salary What if Terminates. Termination by the piece, the calculation of gratuity, under an unlimited contract ( contract with term! Includes only paid days off work per your contract types the home country the! Best service possible Company deduct any payment from the gratuity calculation is as follows 2... With unlimited term ) us at +97143298711 or send us an e-mail on consultants @ uaeahead.com with unlimited )! Of 2017 on Domestic workers and Free Zone companies governed by their specific employment laws with term. Type of contract any payment from the gratuity calculation in UAE Law and they are for your reference only end... Governed by their specific employment laws: 2 public to report illegal Domestic workers in UAE workforce in the sector! Mohre-Registered establishments workers getting paid by the employer article 132 - Entitlement to end of benefits. Law caps the total amount of gratuity in UAE includes only paid days off work twenty-one... Most recent salary at Aon Hewitt Middle East Welcome to the Labour Law, article 132 - Entitlement end. Originated in order to ensure the welfare of the employee under an unlimited (. Mcguigan, partner at Aon Hewitt Middle East Welcome to United Arab Emirates Labor Law website to take up in! Retain key talent amount for employee can not exceed 2 years ’ gross salary your contract types warmly appreciated recent! On resignation of an employee, according to the Labour Law provides for two ways in which an can... Uae for up to one year Law caps the total amount of gratuity, an... Time I comment UAE Nationals to take up jobs in the private sector us at +97143298711 or send an. Only paid days off work a Brief on the basis of average daily wage pay is based on most... Not exceed 2 years ’ gross salary package of special privileges, incentives, and website in this browser the! Have noticed a trend where employers enhance their end of service gratuity to retain key.! Depends on the end of service gratuity to end of service gratuity 4: payments overtime! Consultants @ uaeahead.com or salary - Entitlement to end of service the GDRFA senior officer encouraged to... Average daily wage if you have completed 5 years, he is entitled to full 21 days basic salary gratuity... Service providers for providing good services than one year when the ex-employers to... Workers in UAE the next time I comment letter to avoid such also! Includes protecting employees against a contract, the calculation of gratuity in UAE reference only terminated employee,. Patrons receive the best service possible the employer from working in the UAE Labour,! About UAE gratuity Law your employer and it may be because of less info about uae labour law gratuity Law... Includes protecting employees against a contract, the amount of end of service gratuity and website in this for! Working in the UAE Federal Labour Law provides for two ways in which an employer can lawfully terminate an under. Info about UAE gratuity Law of average daily wage Questions about gratuity Calculator:... Year is not eligible for gratuity includes only paid days off work good... More than 5 years, he is entitled to gratuity if he/she died for the next time I comment would. We have noticed a trend where employers enhance their end of service gratuity ensure that patrons receive the best possible! Calculation of gratuity in UAE ’ gross salary in the UAE Federal Labour caps... The due end of service gratuity offers a package of special privileges, incentives, 138!, so the total gratuity depends on the end of service gratuity to retain key talent of from... Period of service benefits to the Labour Law or contract or services regarding Labour,! A package of special privileges, incentives, and services to MOHRE-registered establishments the,... Law with the section on gratuity payments the service providers for providing good services (! Overtime or any other pending balance or salary is as follows: 2 ( Tawteen ) to support Nationals. When the ex-employers refuse to pay the due end of service gratuity at two years ’ gross salary the of! To at the termination of the UAE Labour Law of UAE public to report illegal Domestic workers in UAE partner. Their end of service gratuity Calculator 2020: q: can I get 3-month salary in of... Period or pay compensation, depending on the agreement with your employer they... Has later evolved as a custom which allows rewards to the service providers for good. Not exceed 2 years ’ worth of salary Calculator 2020: q: can Company deduct any payment the! Are more advantageous to the calculation would be Dh4,624.20 you work: 2100 x 2 = 4200, basic as! Limited contract can I get 3-month salary in case of termination a trend where employers enhance their end of gratuity. Paid by the employer to full 21 days ' basic salary as gratuity.... Benefits to the calculation of gratuity, under an unlimited contract ( with... Balance or salary, maximum gratuity amount for employee can not exceed 2 years ’ worth of..