End of Service Benefit Reform
#17
Forum Regular
Joined: Jan 2014
Posts: 105
Re: End of Service Benefit Reform
I think you’re referring to limited contracts where by resigning you are breaking your contract in which case there might be claw back as part of your contract wording. Those rules will probably be written into plan rules and followed by the trustee in which case you may forfeit it, if that is what you agreed to in your contract with your employer. I believe that will be normal practice anywhere in the world.
#20
Forum Regular
Joined: Jan 2014
Posts: 105
Re: End of Service Benefit Reform
Last I checked, yes.
As weird as it sounds, this does change everything. The trust will HAVE to return the money to the employer and the administrator will have to follow trust guidelines.
Also, the change is for DIFC where the calculation is simplified and has 21 days per 5 years and 30 days post so no forfeiture will apply. Either you get it or not, irrespective of contract type.
As weird as it sounds, this does change everything. The trust will HAVE to return the money to the employer and the administrator will have to follow trust guidelines.
Also, the change is for DIFC where the calculation is simplified and has 21 days per 5 years and 30 days post so no forfeiture will apply. Either you get it or not, irrespective of contract type.
Last edited by shake2000; May 9th 2019 at 6:53 am.
#21
Forum Regular
Joined: Jan 2017
Posts: 177
Re: End of Service Benefit Reform
The accrual % is based on years of service. Once the money goes into the account in your name and held by the trust, the company cannot touch it unless the rules were defined in the plan rules and agreed by you in your contract.
I think you’re referring to limited contracts where by resigning you are breaking your contract in which case there might be claw back as part of your contract wording. Those rules will probably be written into plan rules and followed by the trustee in which case you may forfeit it, if that is what you agreed to in your contract with your employer. I believe that will be normal practice anywhere in the world.
#22
Forum Regular
Joined: Jan 2014
Posts: 105
Re: End of Service Benefit Reform
DIFC and majority if not all free zone employment law has a simplified calculation.
less than 1 year, you get nothing
Between 1 and 5 years, 21 days
Over 5 years, 30 days
There are no conditional reductions in DIFC and free zone employment law.
#23
Forum Regular
Joined: Jan 2017
Posts: 177
Re: End of Service Benefit Reform
I worked in both JAFZA and DMCC, in both cases the EOSB was reduced to 7 days if you resigned. For both, the UAE Labour Law was adhered to, if there was a separate Labour Law used by the Free Zones, it certainly wasn't widely used.
#24
Forum Regular
Joined: Jan 2014
Posts: 105
Re: End of Service Benefit Reform
https://www.difc.ae/files/4414/5448/....4_of_2005.pdf
The proposed changes are for DIFC only which means if others were to adopt it they will need to update their employment law.
#25
BE Enthusiast
Joined: Aug 2008
Posts: 312
Re: End of Service Benefit Reform
#26
BE Enthusiast
Joined: Aug 2008
Posts: 312
Re: End of Service Benefit Reform
EOS across free zones is the same as UAE labour law except for DIFC.
If any employee on an employment contract with undetermined term (unlimited contract) resigns in the first five years of employment, the end-of-service gratuity entitlement is reduced to 1/3rd if the employee has between 1 and 3 years of service, and to 2/3rd if the employee has between 3 and 5 years of service.
If any employee on an employment contract with undetermined term (unlimited contract) resigns in the first five years of employment, the end-of-service gratuity entitlement is reduced to 1/3rd if the employee has between 1 and 3 years of service, and to 2/3rd if the employee has between 3 and 5 years of service.
#27
Re: End of Service Benefit Reform
Theres a big difference between an accrual on the balance sheet and a cash outlay.
#28
Forum Regular
Joined: Jan 2014
Posts: 105
Re: End of Service Benefit Reform
It's interesting how it adds up and how it projects to grow in the future. I use the calculator below which seems to be the only accurate calculator considering the government calculator did not work for me. Please feel free to delete if it breaks any forum rules.
https://www.aonhewitt.ae/home/for-em...ent-calculator