UAE End of Contract Service Benefit
#16
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Joined: Jul 2007
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Re: UAE End of Contract Service Benefit
So the rule appears to be that, irrespective of whether you are here on a fixed term or open-ended contract, you are only entitled to the full benefit package if you are told to leave by your employer. If you choose to leave of your own free will (or find it impossible to work under the conditions imposed by your employer), even if you have been here umpteen years, the greatly reduced benefit package applies. That seems to differ from KSA where I was paid the full package but left of my own free will after 8 years. Please feel free to correct me.
#17
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Joined: Sep 2009
Location: Abu Dhabi
Posts: 1,805
Re: UAE End of Contract Service Benefit
So the rule appears to be that, irrespective of whether you are here on a fixed term or open-ended contract, you are only entitled to the full benefit package if you are told to leave by your employer. If you choose to leave of your own free will (or find it impossible to work under the conditions imposed by your employer), even if you have been here umpteen years, the greatly reduced benefit package applies. That seems to differ from KSA where I was paid the full package but left of my own free will after 8 years. Please feel free to correct me.
Simples.
#18
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Joined: Jul 2007
Posts: 7,028
Re: UAE End of Contract Service Benefit
Grumps, if you join a company on a 3 year contract, and choose not to extend it and leave after you have completed the 3 years, then you are entitled to the full EOS. If you join on a 3 year contract, and choose to leave after 2 years, you get the reduced EOS. If you are on an unlimited/open contract and you resign at any time after 1 year, you get the reduced EOS. Simples.
#19
Re: UAE End of Contract Service Benefit
End of service gratuity is not reduced if you resign after five years of service.
#20
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Joined: Jun 2010
Location: Dubai
Posts: 585
Re: UAE End of Contract Service Benefit
I believe the EOS gratuity increases after five years of employment. Does this mean if after say 6 years, you get the full increased EOS gratuity (30 days per year ?) irrespective of whether you're fired, made redundant or resign ?
#21
Re: UAE End of Contract Service Benefit
Yes it does increase from (as I understand) 21 to 30 days pa.
I've never fully understood if the extra 9 days pa that you get for serving minimum 5 years only applies for year 6 onwards or for calcs for years 1-5 also. Suspect the former.
#22
Re: UAE End of Contract Service Benefit
That's right. 21 days per year for first five years, then 30 days thereafter to a maximum of two years salary in total. (Some bonuses and commissions may be included dependng on contract and circumstances.)
Labour law says no reduction in gratuity after five years service, so reductions only apply for less than five years service and that varies depending on actual period of employment.
#23
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Re: UAE End of Contract Service Benefit
That's right. 21 days per year for first five years, then 30 days thereafter to a maximum of two years salary in total. (Some bonuses and commissions may be included dependng on contract and circumstances.)
Labour law says no reduction in gratuity after five years service, so reductions only apply for less than five years service and that varies depending on actual period of employment.
Labour law says no reduction in gratuity after five years service, so reductions only apply for less than five years service and that varies depending on actual period of employment.
#26
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Re: UAE End of Contract Service Benefit
#28
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Joined: Feb 2008
Posts: 77
Re: UAE End of Contract Service Benefit
In essence there are two forms of contract in the UAE. A limited and unlimited contract. Although technically, both are limited insofar as your ability to work is tied into your ability to continue to hold a valid work visa.
End of service gratuity is calculated only with reference to "basic salary", as per the Labour Law. This relates to the basic salary you are paid at the time at which your employment is terminated. This is fundamental driver for companies in the UAE to split out salary and allowances in the packages that employees are provided. Please refer to Article 134 of the Labour Law on this particular point.
For those employed in "mainland" Dubai (certain of the free zones have their own employment laws and regulations- most notably the DIFC which has its own Employment Law), you will be given 21 days gratuity for each year of service for the first 5 years of service and 30 days thereafter. You will also get gratuity for part years worked too. Gratuity is capped at 2 years salary.
For clarity, if you are employed on an unlimited contract basis as many are and you leave (i.e. you serve notice on your employer) during the first 3 years of service then you will receive 1/3 of your entitlement i.e. 7 days for each year of service. If you exercise your right to terminate between years 3-5 of service then you will receive 2/3 of your entitlement i.e. 14 days for each of service. Once you have completed 5 years service you can leave and are eligible for 21 days service for the first 5 years and 30 days thereafter. For the avoidance of doubt entitlement to end of service gratuity only kicks in once you have one years continuous service. The "discount" principal is set out in Article 137 of the Labour Law.
If your employment is terminated by your employer then you are entitled to your gratuity without any discount, provided that a) you have completed a years service and b) your contract is not terminated pursuant to Article 120 of the Labour Law- so don't go hitting anyone or the like ;-)
For those employed on fixed term contracts (or limited contracts) the general rule is that if you terminate at any time before the expiry of a fixed term contract you will not be entitled to any form of end of service gratuity, unless that employee's service has exceeded 5 years. The provision for this can be found in Article 138 of the Labour Law.
Hope this helps.
End of service gratuity is calculated only with reference to "basic salary", as per the Labour Law. This relates to the basic salary you are paid at the time at which your employment is terminated. This is fundamental driver for companies in the UAE to split out salary and allowances in the packages that employees are provided. Please refer to Article 134 of the Labour Law on this particular point.
For those employed in "mainland" Dubai (certain of the free zones have their own employment laws and regulations- most notably the DIFC which has its own Employment Law), you will be given 21 days gratuity for each year of service for the first 5 years of service and 30 days thereafter. You will also get gratuity for part years worked too. Gratuity is capped at 2 years salary.
For clarity, if you are employed on an unlimited contract basis as many are and you leave (i.e. you serve notice on your employer) during the first 3 years of service then you will receive 1/3 of your entitlement i.e. 7 days for each year of service. If you exercise your right to terminate between years 3-5 of service then you will receive 2/3 of your entitlement i.e. 14 days for each of service. Once you have completed 5 years service you can leave and are eligible for 21 days service for the first 5 years and 30 days thereafter. For the avoidance of doubt entitlement to end of service gratuity only kicks in once you have one years continuous service. The "discount" principal is set out in Article 137 of the Labour Law.
If your employment is terminated by your employer then you are entitled to your gratuity without any discount, provided that a) you have completed a years service and b) your contract is not terminated pursuant to Article 120 of the Labour Law- so don't go hitting anyone or the like ;-)
For those employed on fixed term contracts (or limited contracts) the general rule is that if you terminate at any time before the expiry of a fixed term contract you will not be entitled to any form of end of service gratuity, unless that employee's service has exceeded 5 years. The provision for this can be found in Article 138 of the Labour Law.
Hope this helps.
#29
Re: UAE End of Contract Service Benefit
End of service gratuity can include pay other than basic salary. Regular bonueses or commissions that are set in an employment contract are included - per UAE Labour Law.
#30
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Joined: Mar 2011
Posts: 1,132
Re: UAE End of Contract Service Benefit
Meow you are 'Spot-On' as usual. However, as we all know 'Gratuity' and the way in which it is calculated, are a 'Sojourn into Sophistry' by many employers in the UAE. I would suggest that 'can include' and 'regular' are open to interpretation.