Understanding your employee rights is a very important part of living and working in the UAE.
Below is the labour law, as published by the UAE Ministry of Labour, with regards to end-of-service gratuity pay.
Gratuity pay
Article 132
As amended by Federal Law no. 12 dated 29/10/1986:
The worker having spent one year or more in continuous service shall be entitled to an end of service gratuity upon the termination of his service. The days of absence from work without pay shall not be included in the calculation of the period of service, and the gratuity shall be calculated as follows:
1 - The wage of twenty one days for each of the first five years of service.
2 - The wage of thirty days for every additional year.
Always provided that the total gratuity does not exceed the wage of two years.
Article 133
The worker shall be entitled to a gratuity for the served fraction of a year, provided that he completes one year of continuous service.
Article 134
As amended by Federal Law no. 12 dated 29/10/1986:
Without prejudice to the provisions of certain laws on the pensions and retirement benefits granted to workers in certain establishments, end of service gratuity shall be calculated on the basis of the last wage due to monthly, weekly and daily-paid workers, and on the basis of the average daily wage set forth in Article 57 hereof for the workers getting paid by piece. The wage used as a basis for calculating the end of service gratuity shall not include payments made to the worker in reimbursements, housing, transport and travel allowance, overtime pay, representation allowance, cashier’s allowances, children education allowance, allowances for recreational and social services, and any other bonuses or allowances.
Article 135
The employer may deduct from the end of service gratuity any amounts due to him by the worker.
Article 136
For the purposes of the Article 132, cases of employment preceding the coming into force of the present Law shall not be deemed cases for which the worker is entitled to an end of service gratuity with the exception of cases involving nationals, and such without prejudice to any rights acquired by the worker by virtue of revoked labour laws, the employment contract or any agreement, regulations or by-laws of the establishment.
In the event of the worker's death, his end of service gratuity shall be paid to the beneficiaries thereof.
Article 137
Should the worker bound by an employment contract with an undetermined term leave his work by his own choice after a continuous service of one year at least and three years at most, he shall be entitled to one-third of the end of service gratuity set forth in the foregoing Article.
Should his continuous service be of three years at least and five years at most, he shall be entitled to two thirds of the said gratuity, and to the full gratuity should it exceed five years.
Article 138
Should the worker bound by an employment contract with determined term leave his work by his own choice prior to the expiry of the contract, he shall not be entitled to an end of service gratuity unless the duration of the service period exceeds five years.
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