UAE LABOUR LAW: GRATUITY / SEVERANCE PAY

Labour Law in the UAE  - Federal Law No. 8 of 1980 regulating labour relations as amended by Federal Laws Nos. 24 of 1981, 15 of 1985 and 12 of 1986 (the "Law").


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:

1. 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.
2. Members of the armed forces, police and security units.
3. Domestic servants and their like.
4. 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:

1. A notice period, or any amount due in lieu of the notice period, in the case of an unlimited contract.
2. Compensation for the unreasonable dismissal if the contract was terminated by the employer for unreasonable cause, in the case of an unlimited contract.
3. 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.
4. Payments equivalent to the balance of unutilized leave or any part thereof.
5. Payments for overtime or any balance of wages due and not yet paid.
6. End of service gratuity calculated on the duration of the employment.
7. 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:

1. 21 day's wages for each year of the first five years.
2. 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.

OFFICIAL HOLIDAYS IN UAE

According to the Federal Law No 8 of 1980, Article 74 of  United Arab Emirates states the following: “Each worker shall be entitled to official holidays with pay on the following occasions:

A) New Year’s Day (Hijra): One day;

B) New Year’s Day (Christian): One day;

C) Eid Al Fitr: Two days;

D) Eid Al Adha: Three days;

Workers With Six-month Labour Ban, UAE

People who have been slapped with a six-month labour ban for breaking their contracts before the expiry of two years can work for a new company, provided they hold at least a high school diploma and have been offered a good position and salary by the new company, employers were told by the Ministry of Labour last week.


To lift the ban, an employee should have been offered a minimum salary of Dh5,000 for high school graduates, Dh7,000 for diploma holders and Dh12,000 for bachelor’s degree holders.

The salary must be mentioned in the labour contract.

No fee will be imposed for lifting the ban when these conditions are met, Ali Al Shehi, Senior Administrator at the ministry, said in a seminar held to inform employers about their rights and duties as well as recent ministerial decisions.

GRATUITY / SEVERANCE PAY CALCULATION AS PER UAE LABOUR LAW

The UAE labour law covers many of your rights as an employee including employment contracts, records of employees, salaries, working hours, national holidays, annual leave, health and safety of employees, disciplinary codes of conduct, termination of appointment, repatriation and gratuity or end of service benefits.  The Ministry of Labour has introduced a compulsory electronic salary transfer system, to guarantee prompt salaries of all employees.




Calculation of Gratuity/Severance Pay

According to Article 132 of the UAE Labour Law, a worker who has completed one or more years of continuous service shall be entitled to severance pay at the end of his employment. The severance pay shall be calculated as follows:

21 days’ wage for each of the first five years of service

30 days’ wage for each additional year of service provided always that the aggregate amount of severance pay should not exceed two year’s wage.

30012011 YOU AND THE LAW (QATAR)

~ QATAR – Answered as per Qatar Law

Shall the employee have the right to submit the resignation during the leave?

Qatari Labour Law No. 14/2004, concerning the termination of employment contract states that:

If the employment contract is for unlimited period, the parties thereto have the right to terminate it without any reasons. In such a case, the party which wants to terminate the contract shall notify the other party in writing as follows:

For labourers who are paid their wages annually or monthly, the notification shall be given before at least one month if the service period is five years or less. If the service is more than five years, the notice period shall be at least two months.

If the contract has been terminated without compliance with these periods, the party who terminates the contract shall pay to the other party a compensation equal to the labourer’s wage of notice period or the remaining part.

The resignation of the employee is considered as a termination of the contract by their side due to leaving the work. The Law states that:

30012011 YOU AND THE LAW (UAE)

~ UAE – Questions answered by Advocate Mohammad Ebrahim Al Shaiba of Al Bahar Advocates and Legal Consultants

I worked in a company based in Sharjah; but six months ago, the company asked me to look for a job in another company due to non-availability of work for me and the unstable conditions of the company. Six months later, I returned to the company after failing to get a job in another company and I asked the employer to cancel my visa and to pay my labour dues, but he told me that I am not entitled to claim anything since I left the company for more than six months and that the law entitles the employer to terminate the employee in case of his absence from work for more than seven days without any dues. Please note that the employer did not report to the Ministry of Labour on this matter.

My question here is: what is the position of the law on this matter? Am I entitled by law to claim my rights in full including salaries for the said six months during which I did not work in the company? Please provide your advice in this regard, as the company has terminated me recently.

I would like to advice the questioner, if he failed to reach an amicable solution with the employer, to file a complaint before the Ministry of Labour claiming his labour rights in full, including salaries for the said six months even if he did not work during such period, as the employer is the one who asked the questioner to look for another job and this is against the labour law.

Also, the questioner may claim for compensation for the arbitrary dismissal, as according to the law, dismissing the employee from work due to his claim for his rights is deemed as arbitrary dismissal.

I have worked for one year only under a contract for unlimited period; the company where I am employed pays salaries every three months only due to the financial problems in the company according to the manager and that the company may be shut down if this situation continues.

My question here is: in the event of cancellation, is the matter of ban for six months still applicable as per the new law notes that it is said that the six months ban is no longer applicable at present and others say that it is applicable, therefore my question is: if the law of six months ban is applicable as per the new law, are there exceptions to such ban law?

30012011 YOU AND THE LAW (KUWAIT)

I am working in multinational company for the last 5 years, my contract is renewed every year (one year duration). I joined the company on Feb 15, 2006 and my last contract was renewed on Feb 15, 2010. The company is refusing to renew my contract for one more year and they are giving me a 15 days notice. My question is: As per new Labour Law am I entitled to a 3 month notice?

You must be given a 3-month notice regardless of what type of contract you have, especially since your contract has been constantly renewed every year. If you had been only on a one-year contract and the company had specified that your services would no longer be required after that then things would have been different. Once the contract is automatically renewed, then it no longer remains a limited-period contract and as such the 3-month notice is required

I have been working with a big group of companies for two years. I resigned in August 2010 and completed my three months stay as per resignation acceptance letter issued by authorized signatory of the company. After completing three months when I submitted my clearance form to my immediate boss (General Manager), he refused to sign it until I submitted certain reports which were never my responsibility and in reality I never had access to that information.
The legal department of the company is saying that only after my clearance form is signed by the GM will they sign the transfer/release of residence. My residence will expire on Dec 9, 2010.
What should I do? What options do I have?

If you are being asked to submit reports which were never a part of your duties and the GM refuses to sign your clearance, file a complaint with the Labor-Office in your area. If reports had been required from you, this information should have been passed to you when you resigned, not when the notice period is about to get over

30012011 YOU AND THE LAW (SAUDI ARABIA)

 I have been working for my present company for 17 years. As I understand it, the expiration date of my iqama marks the end of my contract period. If my iqama is due for renewal in January and I plan to leave the company, I should submit my resignation in writing at least 30 days prior to that expiration date.

Should I submit my resignation directly to my employer, or should I submit it through the Labor Office. Is there a special procedure to be followed? I tried to leave the company in 2008 and again in 2009, but the management lured me to stay back with the promise of a salary increase, which I never received. Lastly, my child's exams are in March. Can I ask my employer not to renew my iqama and extend my stay in the country until after my child's exams?

Your knowledge of the law is good. You should focus on negotiating with your employer. After 17 years of work, your employer does not have much justification for preventing you from resigning. If he doesn't give you a raise and you decide to resign, inform your employer in writing at least one month (30 days) prior to the expiration date on your work/residency visa. You should include your request to be allowed to remain until after your child's exams. Considering the long period you have been with the company, your employer doesn't have a legitimate reason not to agree to this request. In case he is adamant and denies your request, file a complaint at the Labor Office in your area.

I would like to ask you about the system for workers who work in a company without sponsorship.  I heard there is punishment announced by the Ministry of Interior for the company which hires such people and the workers who work without sponsorship. If that is the case, to whom can we complain for what happened to us as expatriate workers, against those who sponsored us illegally?  

30112010 YOU & The LAW (KSA / KUWAIT / QATAR / UAE)

KSA – I have been working for a company for four years. I want to know how would my end-of-service benefits (ESB) be calculated if I resign now. Secondly, what is the rule for returning to Saudi Arabia to work for another company in the same or a slightly different profession? Is there a need for a no-objection certificate (NOC) for the new visa?

As you have worked here for four years the end of your contract is the expiration date of your work permit, not the period of time written in your contract. Therefore,  for legal termination you must wait until the expiration date of your work visa.

The ESB is calculated on the basis of the last monthly wage (LMW), which is salary plus all other allowances. You get half of your LMW for each of the first five years of your employment. You get a proportional amount of your LMW for any incomplete year.

30102010 YOU & The LAW (KSA / QATAR / UAE)

QATAR – A person says that he travelled to Qatar to work in a hairdresser’s salon with a contract. However, after two months the sponsor asked him to find a job in some other place. He could not find a job or a new sponsor. Therefore, he left Qatar. He does not have a residence permit in his passport. He asks if it is permissible for him to enter the country again or must he spend at least two years to be able to enter the country again?

The law No. 4/2009 on the organisation of entry and exit of expatriates, their residence and sponsorship indicates that the sponsor should end the proceedings and renovation of residence within a period not exceeding 9 days from the date of termination.

It also stipulates that a worker cannot be granted a visa for two years after leaving Qatar.

By applying this in this case, we find that this person did not get a residence permit in Qatar and he left the country within the grace period. She can enter Qatar anytime without applying the two-year condition.

31082010 YOU and The LAW (KSA / QATAR / UAE)

~ Questions answered by Advocate Muhammad Jaber Nader, based in Kingdom of Saudi Arabia
I am planning to file a complaint in labor court against my company. Can you please explain the rules regarding overtime, such as working on Fridays (my weekly day-off), on Saudi National Day and during Eid holidays. And what is the rate of overtime pay?
To get overtime, you must first have specific instructions from your employer to work extra hours. If you do not have written instructions to do overtime, your work will be considered voluntary. If you can prove you were ordered to work on the days in question then you are entitled to claim overtime. The best proof is proof in writing, otherwise it’s simply your word against your employer’s.....

YOU and The LAW (KSA / QATAR / UAE)

~ Questions answered by Advocate Muhammad Jaber Nader, based in Kingdom of Saudi Arabia
I came to work as a janitor seven years ago. I sweep the floor, wash the dishes and do all errands that an office servant would do. The company treats me as a house servant. They do give me neither vacation time nor overtime, among other denials of my rights.
The job category "house servant" requires you to work within a family in a private residence. "House servants" work under different rules. Working in an office puts you under the category of "office janitor," not "house servant". You are right to say your employer is illegally denying your rights under the labor law as a janitor at a company.
The labor law says about....

30062010B SAMAHANG PINOY KAWANGGAWA

Bros, Sis, Acquaintances, Friends, Kababayans,

THE TESTING OF YOUR FAITH PRODUCES PATIENCE‏
COUNT IT ALL JOY WHEN YOU FALL INTO VARIOUS TRIALS, KNOWING THAT THE TESTING OF YOUR FAITH PRODUCES PATIENCE. (JAMES 1:2-3)

We all have times in our lives when our patience and our endurance seem to be running low. Times that we may even think that we can't take it anymore. When that happens to you remember that our Heavenly Father is a GOD OF PATIENCE AND COMFORT. (ROMANS 15:5) He is always there for us, and will lead us out of our problems if we practice patience.

Now we learn by reading the Scriptures that patience is a Virtue. FOR WHATEVER THINGS WERE WRITTEN BEFORE WERE WRITTEN FOR OUR LEARNING, THAT WE THROUGH THE PATIENCE AND COMFORT OF THE SCRIPTURES MIGHT HAVE HOPE. (ROMANS 15:4)...

30062010A SAMAHANG PINOY KAWANGGAWA

Bros, Sis, Acquaintances, Friends, Kababayans,

If you need a friend or someone to talk to, guide you, listen to you, shoulder to cry on or whatever you are experiencing in life right now, could it be sadness or happiness, feel free to contact Ma’am Isabel personally at 00971 50 7528573 any day from 9PM onwards, wherever you are....