Khaleej Times, Sunday, Nov 13, 2022 | Rabi Al Thani 18, 1444
Gratuity in UAE: Will leave without pay impact final settlement calculations?
Emirates:
Question: I had to take some leaves without pay due to an emergency
back home. Could you advise if this will impact my end-of-service gratuity?
Also, please explain how it is calculated and paid.
Response: Pursuant to your queries, it is assumed that you are an expatriate
employed by a mainland company in the UAE on a full-time basis. Therefore, the
provisions of Federal Decree Law No. 33 of 2021 on the Regulation of the
Employment Relations (the ‘Employment Law’) are applicable.
In the UAE, an employee is entitled for severance pay (gratuity) if he or she
has completed one year of continuous service with an employer. This is in
accordance with Article 51(2) of the Employment Law, which states: "A foreign
full-time employee who completes one or more year in the continuous service is
entitled to a severance pay, which is calculated on the basis of the basic
salary as follows:
a. 21 working days salary for each of the first five years of service.
b. 30 working days salary for each subsequent year of service.”
Further, period of absence from work without pay may not be included while
calculating the severance pay (gratuity). This is in accordance with Article
51(4) of the Employment Law, which states: “Days of absence from work without
pay shall not be counted within the period of service.”
An employer may deduct certain amount from the gratuity of an employee which is
due to it either by law or on an order of the court. This is in accordance with
Article 51 (7) of the Employment Law, which states: ”The employer may deduct
from the severance pay, any amounts due by law or court order, in accordance
with the conditions and procedures set by the Executive Regulations of this
Decree-Law.”
The gratuity is usually paid along with other end of service benefits within 14
days of termination or expiry of an employee’s employment contract. This is in
accordance with Article 53 of the Employment Law, which states: “The employer
shall pay the employee within 14 days after the expiry of the contract al his
salary and other entitlements provided for in this Decree-Law and its
implementing resolutions, the contract or the Establishment by laws.”
Based on the aforementioned provisions of law, you as an employee is entitled
for severance pay (gratuity) if you have completed more than one year of
continuous service with your current employer. By practice, it is paid at the
end of service of an employee along with other entitlements in the registered
bank account. The said amount is paid through the Wages Protection System (WPS)
of the Ministry of Human Resources and Emiratisation (the ‘MOHRE’).