According to Article 3 of the Law, the Law applies to all staff and employees working in the United Arab Emirates, whether UAE national or expatriate. However certain categories are exempted from its applicability:
- Staff and workers employed by the federal government, government departments of the member-emirates, the municipalities, public bodies, federal and local public institutions and those staff and workers employed in federal and local governmental projects are exempt.
- Members of the armed forces, police and security units.
- Domestic servants and their like.
- Agricultural workers and persons engaged in grazing (this exemption does not include persons who are employed in corporations which process agricultural products and or those who are permanently engaged in the operation of/or repair of machines required for agriculture.
GRATUITY / SEVERANCE PAY
Section II, Article 132-141
Employee entitlement at the termination of the employment contract
The employee at the termination of the employment contract will be entitled for to the following:
- A notice period, or any amount due in lieu of the notice period, in the case of an unlimited contract.
- Compensation for the unreasonable dismissal if the contract was terminated by the employer for unreasonable cause, in the case of an unlimited contract.
- In the case of a limited contract, compensation equivalent to the period until the end of the contract, or three month's salary whichever is greater.
- Payments equivalent to the balance of unutilized leave or any part thereof.
- Payments for overtime or any balance of wages due and not yet paid.
- End of service gratuity calculated on the duration of the employment.
- Repatriation expense as per the law or the contact.
End of service gratuity in terms of compensation
An employee who completes one year or more in continuous service shall be entitled to gratuity at the end of the service. The gratuity shall be calculated as follows:
- 21 day's wages for each year of the first five years.
- 30 day's wages for each additional year on condition that the total of the gratuity shall not exceed the wages of two years.
Gratuity Calculation
Gratuity is calculated on an annual basis if the employee has actually completed one year of employment with the employer or more. The day of absence from work without pay shall not be included in calculating the length of service. However, if the employee completed a year in service he will be entitled to a gratuity for the fraction of the year proportional for the part of the year he spent in work provided that he has completed one year in continuous service.
