What happens when your employment contract ends? This article provides an in-depth look at the benefits after termination of employment in UAE.
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Benefits after termination of employment in UAE.
For foreign workers, the benefits after termination are outlined in Article 51 of the UAE Labour Law. Some of the highlights include:
- Employees are entitled to a gratuity for each year of service, provided they have served for at least one continuous year.
- The gratuity is calculated based on the last basic salary of the employee, excluding allowances.
- Employers can deduct any money owed to them from the employee’s gratuity.
- All benefits must be paid within 14 days of the contract’s end.
Calculating Gratuity Pay.
Gratuity pay is a significant component of the benefits after the end of employment in UAE. The amount varies depending on the length of service:
- Employees who have served less than a year are not entitled to any gratuity pay.
- Employees receive full gratuity pay for service between one to five years based on 21 days’ salary for each year.
- For service beyond five years, the gratuity increases to 30 days’ salary for each year following the first five years.
However, the total gratuity should not exceed two years’ wages.
The service period calculation does not include days of absence from work without pay. Therefore, these days do not contribute towards the analysis of the gratuity.
Any money the employee owes to the employer can be deducted from the gratuity. This includes any loans or financial obligations the employee may have taken from the employer during their term of service.
The payment of all benefits, including the gratuity, should be made within 14 days from the end of the contract. This is a strict deadline that employers must adhere to, as per the UAE Labour Law.
FAQs about end of service benefits UAE.
Conclusion.
Understanding your rights and obligations as an employee in the UAE is crucial to ensure that you receive the correct benefits after termination of employment.
Whether you’re a UAE national or a foreign worker, familiarizing yourself with the UAE Labour Law can go a long way in safeguarding your interests.
For further information, seek advice from experienced labour lawyers like Al Mulla.
Office of Al Mulla. Whatsapp: Click here. Location: Dubai. Phone: 00971501961291.
We recommend you read about terminating an employee on workers compensation UAE Dubai and learn about the termination pay contract ending.
A legal consultant specializing in UAE labor law. He regularly publishes articles on the website and writes on various areas of UAE law, with a specific focus on labor law.