End of service benefits Dubai, commonly known as gratuities, are financial compensations given to employees upon termination of employment.
Governed by UAE Labour Law, gratuity eligibility and calculations depend on the employee’s service duration and basic salary.
Consider Ahmed, who worked for six years and resigned. He wanted to know whether he was entitled to gratuity and how it was calculated.
Like him, many employees seek clarity on gratuity rules, eligibility, and legal recourse.
This article explains Dubai gratuity laws, Article 51 of the UAE Labour Law, and employee rights to ensure you receive your rightful end-of-service benefits.
Contact our expert labor law firm in UAE. Click the WhatsApp icon below.
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End of Service Benefits Dubai UAE
UAE end of service gratuities are lump-sum payments that employers must provide to employees upon the termination of their employment.
The gratuity system is designed to reward employees for their service and support them financially as they transition to a new job or retirement.
In Dubai, gratuity is calculated based on the employee’s basic salary and the total duration of service.
This compensation is legally required under Federal Decree-Law No. 33 of 2021, which governs labour relations in the UAE.
Gratuity Eligibility in UAE
To qualify for gratuity benefits, employees must meet specific criteria outlined by the Dubai gratuity law:
- Minimum Service Requirement: Employees must have completed at least one year of continuous service with the employer.
- Employment Type: Gratuity applies to full-time employees. Part-time, temporary, or contract-based employees may not be eligible unless specified in their contracts.
- Reason for Termination: Employees who resign or are terminated are generally entitled to gratuity, unless termination is due to gross misconduct under Article 44 of the UAE Labour Law.
- Employees who resign voluntarily after one year of service are entitled to gratuity, but those dismissed for misconduct may forfeit their entitlement.
Article 51 UAE Labour Law
Article 51 of the UAE Labour Law explicitly outlines gratuity entitlements for employees who complete one or more years of continuous service. The key highlights of this article include:
- Gratuity is calculated based on the employee’s last drawn basic salary.
- Allowances such as housing, transport, or bonuses are excluded from gratuity calculations.
- If an employee is terminated without just cause, they are entitled to full gratuity benefits.
- If an employee resigns, they are still eligible for gratuity benefits under the UAE law.
Employers must adhere to Article 51, ensuring that employees receive their rightful gratuity as per labour regulations in Dubai.
UAE Labour Law Gratuity Calculation
The gratuity amount depends on the employee’s basic salary and the years they have worked with the company. The UAE Labour Law provides explicit formulas for gratuity calculations:
- Employees who have completed between 1 and 5 years of service are entitled to 21 days of basic salary for each year worked.
- Employees who have worked over 5 years are entitled to 21 days of basic salary for the first five years and 30 days for each additional year beyond the first five years.
- The total gratuity amount cannot exceed two years’ worth of the employee’s basic salary.
Dubai Gratuity Rules
The end of service benefits Dubai are the same as those set by the UAE Labour Law, which we detailed previously.
Employees in mainland Dubai are entitled to severance pay calculated based on their length of service.
The main difference is that DIFC Gratuity Calculation has replaced the traditional gratuity system with the Employee Workplace Savings Scheme (DEWS).
DEWS offers employees the option to invest their end-of-service benefits in a savings account, providing more flexibility and control.
UAE Labour Law Resignation Benefits
As previously discussed, employees who resign after completing one year of service are entitled to end-of-service benefits.
The key difference in resignation is the requirement of a notice period (typically between 30 and 90 days) as per the employment contract.
If an employee resigns without serving the notice, they might be required to compensate the employer unless the resignation is due to employer violations.
The gratuity calculation for resignation is the same as termination, based on the basic salary only, excluding allowances.
However, the distinction here is the requirement to follow the resignation process as stipulated in the employment contract.
Example: If an employee resigns after 4 years of service with a basic salary of AED 10,000, the 21 days’ yearly salary will total AED 28,000.
In summary, while the end of service benefits Dubai calculation remains the same, the resignation procedure and notice period add a layer of complexity compared to termination scenarios.
UAE Employee Resignation Gratuity Lawsuit
Sometimes, employees face challenges in claiming their gratuity due to employer disputes, non-payment, or miscalculations.
If an employer fails to provide gratuity, the employee has legal options:
- Filing a Complaint with MOHRE
Employees can lodge a formal complaint with the Ministry of Human Resources and Emiratisation (MOHRE) if their employer refuses to pay gratuity. - Labour Court Proceedings
If the dispute remains unresolved, employees can escalate their case to the Dubai Labour Court, where a judge will review it and ensure compliance with UAE Labour Law. - Legal Consultation
Employees can seek assistance from employment lawyers to ensure they receive their full end-of-service benefits.
We recommend you read about Crafting Professional Resignation Letter in UAE with Sample from Labor Lawyer and learn about Resigning during Probation Period in UAE Dubai.
Dubai Gratuity Law and Employee Rights
Employers in Dubai are legally bound to pay gratuity to employees who meet the eligibility criteria. Employees can fully pay their gratuity within 14 days from the last working day.
Legal action can be taken under UAE Labour Law regulations if an employer delays or refuses to pay gratuity.
Legal Services for Gratuity Rules in UAE
If you are facing issues related to gratuity disputes, non-payment, or miscalculated gratuity, our legal team can assist you with:
- Gratuity Calculation Assistance: Ensuring that you receive the correct end-of-service benefits.
- Filing Complaints and Legal Representation: Assisting you in filing complaints with MOHRE and pursuing legal action if necessary.
- Employment Contract Review: Advising you on employment contracts and UAE labour law compliance.
For expert legal assistance, contact us by clicking the WhatsApp button at the bottom of the screen.
FAQs about Gratuity Law in UAE
Conclusion.
Understanding end of service benefits Dubai is essential for employees seeking financial security after resignation or termination.
UAE Labour Law provides clear guidelines on gratuity eligibility, calculation, and legal procedures to protect employee rights.
Employers must ensure timely gratuity payments, and employees should seek legal support if they encounter disputes.
If you need personalized legal advice on gratuity entitlement, our law firm is here to help.
Contact our labor law firm in UAE for expert help. Click the Whatsapp icon below.
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.
