crw1979

Thanks and no problem. I hate to disagree with statements made but the provisions of the Labour Law (or at least the English translation- which is not the governing version in any event) provides as follows (under Article 134):

"The wage used as a basis for calculating severance pay shall not include whatever is given to the worker in kind, housing allowance, transport allowance, travel allowance, overtime pay, representation allowance, cashier’s allowances, children education allowance, allowances for recreational and social facilities, and any other bonuses or allowances."

Therefore with respect I do not agree (based on the provisions of the Labour Law) with the previous statement about the inclusion of bonuses for the calculation of end of service gratuity. Obviously, an employer is at liberty to offer benefits greater than those provided for under the Labour. However, as noted earlier part of the reason that many employers will still adopt the allowances/bonus structure within a salary package is so at to limit gratuity liability.

Kind regards

jackthehat

My point exactly! - Salary is Salary! I always try to avoid allowances (on both sides of the fence). The company I work for is quite particular in getting the calculation correct, and we do not 'Quibble' over a few hundred here or there. We also include a 'Gratuity Statement' on the monthly Pay-Slip! - Yes, we give our staff Pay-Slips!

crw1979

Wise choice! Anyway hope that helps for all who view.

Kind regards

jackthehat

Pensions -v- Gratuity being discussed again.
http://gulfnews.com/business/your-mo...efits-1.822898

OleJanx

Any old-timers out there remember the Saudi's GOSI set-up? (dates me a bit...)

jackthehat

Unfortunately, I do not remember GOSI (only got to Middle East in 1996). Although I do remember Pounds Shillings and Pence, Harold Macmillan as the Prime Minister, and Kennedy being Shot! - I feel ancient!

OleJanx

IIRC, GOSI was General Organization for Social Insurance, and was a pension, payable anywhere in the world on reaching 60, that the Saudi's forked out to expats who went to Saudi in the early Seventies until the mid eighties, albiet with with some employee contributions. In the mid-eighties, when it appeared to stop, there used to be little adverts in the UK papers advising on how to get GOSI payments back.
Different generation, I guess.

Wikipedia has a (typically unhelpful) say on it.

Meow

I'm afraid you are incorrect when it comes to gratuity and REGULAR commissions. My comments are based on rather more than just having read an interpretation of the labour law.

crw1979

[QUOTE=Meow;9442166]I'm afraid you are incorrect when it comes to gratuity and REGULAR commissions. My comments are based on rather more than just having read an interpretation of the labour law.[/Q

I think earlier you noted "bonuses" which is where I took issue with what you said. I presume that you are basing the point on "commissions" on the paragraph in a prominent local law firm's Labour Law publication which states that a UAE court judged that regular commissions would be taken into account or alternatively in relation to discussions that you have had with the Ministry of Labour which you noted in an article in the National in February. It would be interesting to see the circumstances of the judgment, particularly given that as a civil law jurisidciton there is no binding precedent as there would be in a common law jurisdiction and as such courts are free to interpret the law as they see fit in the circumstances. I would certainly be interested in you sharing any further information on this point, in particular any written advice that the Ministry of Labour have provided on this point and legal opinion you have received in support of the same. Thanks.

mentalist

OK so, according to the UAE Labour Laws, I should get 21 days for each of the first 5 years as gratuity, but how is the daily rate calculated? If I work 20 days a month, would it be my monthly salary divided by 20 or my monthly salary divided by the actual number of days in a month? It may sound trivial but it makes a difference of nearly AED50,000 in my case. Does anybody know?

weasel decentral

I am sure one of the resident experts will answer better, but I'd imagine going to be your monthly salary divided by 30 and then multiplied by 21. Otherwise if you took it as 20 working days they would essentially say one months salary?

that's how its been worked for me so far (or some variation of it).

As a maths exercise

so 21/21- 21/30 = 50,000

3/10 = 50,000

payout (max)= 166,000 / divided by years worked over 5 (taking 5) = 33,000aed

salary approximately 9,000 USD per month?

Millhouse

Use 21 days. The accrual works out to be roughly 5.5% of your salary each month.

Weasel, I made it 8k USD...

mentalist

Why use 21 days? It should be 30 or 31 days surely assuming that it's not working days.and my salary is much less than US$9K.

Millhouse

I don't make up the rules All I know is, when I left my last place it was 21 days. They were very open about it and showed it as a monthly accrual on my payslip (5.5ish%). The law says 21 days per year, 21/365.25 = 5.7%. I think it's much easier to think of it as a %.

Anyway, I rounded up - I calculated it at 7.5k USD...

mentalist

I obviously haven't made myself very clear. I know you get 21 days pay. What I was querying is how you calculate the daily amount payable. If it's indeed 21/365.25 then fair enough, but we don't work 365.25 days a year...do we?