September 18| U.A.E.
All that you need to know!
- An employee is entitled to receive the gratuity as per the Federal Law No. 8 of 1980 according to the ‘Employment Law’.
- The employer is bound to calculate and provide with gratuity to the employee if the employee has completed a year of the continuous service fulfilling the article 132 of the Employment Law.
- The days of absence from work without pay shall not be taken into consideration while calculating the period of services.
Understanding the Law
- Under the ‘Employment Law’, Article 132 states that “An employee who has completed a period of one year or more years under the continuous services is entitled to severance pay on the termination or separation of the employee and employer.”
- For the five years of service, 21 days’ remuneration shall be calculated for each year.
- 30 days’ remuneration shall be counted for every additional year.
- Article 137 states that if an employee, who is bound by a contract of unlimited duration, leaves his work after the continuous service of at least 1 year, he shall be provided for the one-third of the severance pay.
- Similarly, if an employee leaves his work after the service of three years but not five years, then he or she is entitled to two-third of the severance; and finally if the employee discontinues his job after five year then he or she is entitled to full severance pay.
- Article 139 makes it clear that an employee is not entitled to any severance pay if he or she is dismissed from service for any specified reasons in article 120 of this law or if he or she resigns in order to avoid the procedure of dismissal.
- Also the employee cannot demand severance pay if he or she leaves work without any prior notice or before completing the contract he or she agreed to.