One crucial aspect employees must know about before resigning is the UAE labour law resignation gratuity.
This article breaks down the complex legal nuances surrounding the resignation gratuity, helping you navigate this process easily.
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New UAE labour law resignation gratuity 2023.
As per Article 51 of the new UAE Labour Law, the rules for end-of-service benefits for foreign workers in the private sector are slightly different. Here’s a brief overview:
- The employee must have completed at least one year of continuous service.
- The gratuity is calculated based on the employee’s last basic salary, excluding allowances such as housing, conveyance, utilities, furniture, etc.
- If the employee owes any money to the employer, the employer may deduct the amount from the employee’s gratuity.
- The employer must pay all end-of-service entitlements within 14 days from the end of the contract.
New UAE labour law gratuity calculation.
The gratuity pay is calculated based on the length of the employee’s service. Here’s a step-by-step guide to understanding the calculation:
- Less than 1 year of service. The employee is not entitled to any gratuity pay.
- More than 1 year but less than 5 years of service. The employee is entitled to full gratuity pay based on 21 days’ salary for each year of work.
- More than 5 years of service. The employee receives a total gratuity of 30 days’ salary for each year of work after the first five years.
In all cases, the total gratuity should not exceed the wage of two years.
For employees working part-time or on a contract basis, the calculation of the end-of-service benefit is slightly different. The formula for this is as follows:
(Number of working hours in the employment contract per year / Number of working hours in the full-time contract per year) * 100 = Percentage on which the end-of-service benefit should be calculated.
Then, this percentage is multiplied by the value of the end-of-service benefit due for the full-time contract.
FAQs about resignation gratuity.
Understanding the UAE Labour Law resignation gratuity is crucial for any employee planning to resign.
With the proper knowledge and professional guidance, you can ensure that you receive the benefits you are entitled to, making your transition to a new job or career path smoother and more secure.
Remember, the law is complex, and every situation is unique. Therefore, always seek professional guidance when navigating these legal waters.
Contact Younis Mohammed Al Blooshi for expert advice on all matters related to UAE’s labour laws and legal issues. He’s not just a legal professional; he’s a reliable and approachable guide in the complex landscape of labour law.
Contact the office of Younis Mohammed Al Blooshi via Whatsapp. Click here. Or visit us at our address: Sobha Ivory 1 – Al Amal St – Business Bay – Dubai. You can also call us on phone: 00971589984123.
Also, you can consult the best Labor Lawyer in Dubai.
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.