End-of-Service Gratuity in the UAE The efficiency of companies and institutions fundamentally depends on the performance and competency of the human resources they contain.

The performance of the entire labour force necessitates attention to their needs, which gave rise to the policies of incentives, compensation, and the End-of-Service Gratuity in the UAE.

To obtain legal consultation regarding the End-of-Service Gratuity in the UAE, contact the best specialized law firm in the Emirates: Samaha Law Firm in the UAE.

End-of-Service Gratuity in the UAE.

There is no doubt that monetary incentives, in addition to financial entitlements in their various forms, are the ultimate goal of any worker or employee and their primary objective for performing work efficiently and exerting efforts to do it properly, in addition to other goals such as gaining experience and developing skills.

Based on the awareness of the authorities concerned with labour affairs, laws were regulated to ensure that the worker receives various financial incentives, including the End-of-Service Gratuity in the UAE.

The End-of-Service Gratuity in the UAE is an amount of money that the employee or worker is entitled to upon the termination of the contractual relationship with the entity they work for, where it is described as an appreciation reward for all their efforts throughout the period of service.

Despite the importance of this gratuity and its role in improving work performance, raising efficiency, and the necessity of granting it under the UAE Labour Law, it must be granted according to specific conditions and based on a mechanism that ensures fairness in awarding this gratuity.

Accordingly, the value of the End-of-Service Gratuity in the UAE may vary:

• Between workers and employees in the private sector and the public sector.
• For fixed-term or unlimited-term employment contracts.
• The manner in which the contractual relationship was terminated.

It is important to mention that the End-of-Service Gratuity in the UAE is a vested right for the worker, whether a citizen or a foreigner, although this is conditional upon certain provisions according to Article 51 of the UAE Labour Law. The worker can claim it by filing a lawsuit if they are deprived of it.

However, the End-of-Service Gratuity in the UAE in the private sector can differ between full-time workers and those working in other work patterns, such as job-sharing, part-time work patterns, and others.

Since the value of the End-of-Service Gratuity in the UAE can depend on the worker’s wage and years of service: if the years of service do not exceed five years, the gratuity is calculated as 21 days’ wage for each year. If the years of service exceed that, 30 days’ wage is calculated for each year.

The End-of-Service Gratuity for teachers in the UAE can also primarily and fundamentally be linked to the value of the last salary the teacher received and the duration of service spent in the educational system.

In addition, the worker or employee is entitled to the End-of-Service Gratuity in the UAE in the case of resignation, and the institution or employer is not allowed to deprive them of it if the worker adhered to the work and its conditions and did not violate the concluded contract or the labour law.

It must be mentioned that the End-of-Service Gratuity in the UAE for government employees can also be given in proportion to the actual period of service the employee spent working for the government entity, according to the pension and social security legislations approved in the UAE.

End-of-Service Gratuity in the UAE for Government Employees

There are many differences between working in the government and private sectors in the United Arab Emirates. This is due to the fact that some employment relationships in the private sector are subject to the Labour Law, while government employee affairs are subject to the Human Resources Law.

However, the End-of-Service Gratuity is one of the labour rights shared between the public and private sectors, despite differences in the mechanism of calculation and application according to the laws regulating them.

In addition, the method of calculating the End-of-Service Gratuity in the UAE in the government sector differs between the Emirati citizen employee and the non-citizen employee.

Calculation of End-of-Service Gratuity in the UAE for Citizen Employees

The entitlements of citizen government employees are calculated according to the provisions of the Pensions and Social Security Law, as follows:

• The insured person receives an End-of-Service Gratuity in the UAE equivalent to one and a half months’ wage for each of the first five years, provided that their service period is not less than one full year, according to Article 39 of the UAE Pensions and Social Security Law.
• The insured person receives an End-of-Service Gratuity in the UAE equivalent to two months’ wage for each of the subsequent five years.
• The insured person receives an End-of-Service Gratuity in the UAE equivalent to three months’ wage for each year subsequent to the first ten years.
• The value of the gratuity is calculated based on the pension calculation salary.

Calculation of End-of-Service Gratuity in the UAE for Non-Citizen Employees:

A non-citizen government employee working full-time may receive an End-of-Service Gratuity in the UAE upon the termination of their service, according to the provisions of Article 41 of the Federal Government Human Resources Law, as follows:

• The End-of-Service Gratuity in the UAE for government employees is calculated based on the basic salary.
• The government employee receives the equivalent of 21 days’ basic salary for each year of the first five years.
• The government employee receives the equivalent of 30 days’ basic salary for each year exceeding that.
• The employee is not entitled to the End-of-Service Gratuity if their service period with the government entity is less than one continuous year.
• The notice period and the total number of accrued leave days that the employee did not use are included in the calculation.
• A fraction of a month is counted as a full month.
• The End-of-Service Gratuity in the UAE for an employee who obtains the nationality of the state is calculated based on the last basic salary.
• The federal entity has the right to deduct any amounts owed from the End-of-Service Gratuity in case of outstanding debts or other financial obligations.

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