End-of-service gratuity is one of the most important dues an employee waits for when a job ends, and it is often the first point of disagreement with the employer. This guide explains the general rule in the federal Labour Law for full-time private-sector employees; every contract has its own details.
The general rule
- An employee is entitled to gratuity after completing at least one year of continuous service.
- It is based on the last basic salary, usually without allowances.
- For each of the first five years: 21 days’ pay.
- For each year after that: 30 days’ pay.
- The total does not exceed two years’ pay.
A simple example
An employee who worked seven years: five years × 21 days = 105 days, plus two years × 30 days = 60 days, a total of 165 days of basic salary; parts of a year are usually counted pro rata. This is an illustration, and unpaid leave or amounts owed by the employee can change the final figure.
When is it paid?
The law requires the employer to pay the employee’s dues within a short period after the employment ends, about two weeks. If payment is late, keep your contract, payslips, termination letter and all correspondence.
If a dispute starts
- Start with a polite written claim to your employer.
- If that fails, file a complaint with the Ministry of Human Resources and Emiratisation, the first step in most labour disputes.
- If the complaint is not settled amicably, it is referred to the competent court.
When to talk to a lawyer
Before you sign any final settlement or acknowledgement that you have received your dues, and when there is a disagreement about the basic salary or the length of service. We work out your dues with you in numbers and explain the best route for your case.
