You are on page 1of 3

Gratuity and End of service settlement

Posted in United Arab Emirates forum 24 Jun 2013, 13:42
Dear ones,
Just to share some details about UAE gratuity settlements and end of seri!e settlements"
#ules !om$letely de$ends to %hat ty$e of &abor !ontra!t you hae" 'here are t%o ty$es of
!ontra!t in UAE:(
1) &imited *ontra!t 2 ) Unlimited *ontra!t
1) &imited *ontra!t
'he one %ho hold limited !ontra!t, his + her !ontra!t %ill be for a shorter $eriod of 2 years %hi!h
!an be rene%ed for the same $eriod later" 'hose on this !ontra!t %ill not hae any rights for
gratuity until they finish a minimum $eriod of 0, years" After 0, years, %heneer they %ant to
leae the !om$any- they %ill be entitled to get 30 days of basi! $ay for ea!h year they %or.ed"
Em$loyee/s last 03 months basi! $ay should be ta.en for the !al!ulation of 0ratuity" 1 2ot %hat
ty$ed in your labor !ontra!t)
3or e4am$le 5f the $erson %or.ed for 6 yrs and de!ided to leae !om$any" 7is monthly salary
for last three months %as 6000 Dhs and his basi! $ay %as 3000 Dhs- 5f so he %ill be entitled to
get AED 3000 4 06 8ears 9 1:000 Dhs as his gratuity and one %ay airfare allo%an!e+ flight
ti!.et to his home !ountry"
'hat %ill be his end of settlement"
;n &imited *ontra!t( Em$loyee !an leae the !om$any %ith a noti!e for immediate effe!t %hile
he should $ay 4, days of his basi! $ay as !om$ensation" else he has to gie 4, days noti!e $eriod
1<ome !om$anies are !harging both together to staff %hi!h is against the la%( Either noti!e
$eriod or 4, days basi! $ay as !om$ensation( only one should !harge to em$loyee) and staff is
entitled to get salary for noti!e $eriod ( no free seri!e re=uired>>
2) Unlimited *ontra!t
'his !ontra!t is starting %ith a date %ithout an end date" ?hoeer !om$lete 2 years on this
!ontra!t %ill be entitled to get their gratuity" 'his also %ill !onsider basi! $ay de$ends to last 3
months salary 1 not to %hat ty$ed in labor !ontra!t)"
@ ?ho !om$leted 24 months %ill get A days of basi! $ay for ea!h year they %or.ed
@ ?ho !om$leted more than 24 months and u$to 36 months %ill get 14 days of basi! $ay for
ea!h year they %or.ed
@ ?ho !om$leted more than 36 months and u$to 60 months %ill get 21 days of basi! $ay for
ea!h year they %or.ed
@?ho !om$leted more than 60 months %ill get 21 days of basi! $ay for ea!h year they %or.ed
u$to , years and remaining years %ill be 30 days of Basi! Pay"
@@All the $eo$le for aboe !ategory %ill get one %ay flight ti!.et to their home !ountry %ith
gratuity settlement"
3or e4am$le if the $erson/s basi! $ay is AED 3000
%ho !om$leted 24 months 9 3000+ 30 Days 4 0A Days 9 A00 Dhs 4 02 years 9 AED 1400 C ;ne
%ay Airfare
more than 24 months u$to 36 months 9 3000+30 Days 4 14 Days 9 1400 Dhs 4 DDD 8ears 9 DDDD
C ;ne %ay Airfare
Eore than 36 months u$to 60 months 9 3000+30 Days 4 21 Days 9 2100 Dhs 4 DDDD C ;ne %ay
Eore than 60 months 9 AED 3000+30 Days 4 21 Days 9 AED 2100 Dhs 4 0, 8ears C AED
3000 4 DDD 1#emaining time after , years) C one %ay ti!.et"
;ne Unlimited !ontra!t ( em$loyee has !om$lete freedom to leae the !om$any anytime %ith a
30 days noti!e" *om$any has no right to !harge any amount to em$loyee as any !om$ensation
for isa+ labor !ard""et! and they should hae to settle all gratuites as mentioned aboe"
F;2 B;'7 *;2'#A*'< 53 EEP&;8EE 7A< A28 PE2D520 GA*A'5;2< DA8<(
'7E2 '7E8 *A2 *;2<UEE E5'7E# ?5'7 '7E5# 2;'5*E PE#5;D ;# '7E8
<7;U&D 0E' 5' *A<7EDF
2; *;EPA25E< 52 UAE *A2 EAHE '7E5# ;?2 &A?""" ?E 7AGE ;2&8 ;2E &A?
3;# A&& *;EPA25E< A2D A&& <7;U&D 3;&&;? 5'"
if any !om$any tried to ma.e any troubles to em$loyee u$on their resignation- $lease $ro!eed
to &abor de$artment and they %ill do eerything %ell for you"
5n the matter of 'E#E52A'5;2 135#ED) the la% sate as follo%s:(
;n the termination of the em$loyment !ontra!t, an em$loyee is entitled to the follo%ing :
A noti!e $eriod, or any amount due in lieu of the noti!e $eriod in the !ase of an unlimited
5n the !ase of an unlimited !ontra!t, !om$ensation for unreasonable dismissal if the !ontra!t %as
terminated by the em$loyer for unreasonable !ause" 121 Days of basi! Pay for the ea!h year they
%or.ed ( for e4: if the $erson %or.ed for 1"6 yrs it should !al!ulated as 21 days 4 1"6 yr 9 34
5n the !ase of a limited !ontra!t, !om$ensation e=uialent to the $eriod until the end of the
!ontra!t, or three monthIs %ages 1Basi! Pay), %hi!heer is shorter"
Payments e=uialent to the balan!e of unutilised leae or any $art thereof"
Payments for oertime or any balan!e of %ages due and not yet $aid"
End of seri!e gratuity !al!ulated on the duration of the em$loyment"
#e$atriation e4$enses as $er the &a% or the em$loyment !onta!t , subJe!t to the em$loyee not
being in iolation or in brea!h of either the &a% or the em$loyment !ontra!t"

Related Interests