Employment is very uncertain during these times. And if you’re among those who unfortunately lost their jobs while outside of the UAE, do not fret, as there are ways on how you can still claim your benefits as employees as stated by the UAE law.
Also Read: Legal Steps to Take before Resigning from your Job in the UAE
One of these benefits is the gratuity pay (also known as end-of-service benefits). In this post, we will share important information about this benefit and how you can claim it, even if you are outside of the UAE.
How to Claim Your Gratuity Pay from Outside the UAE
According to Article 132 of the UAE Labor Law, “the worker, having spent one year or more in continuous service, shall be entitled to an end-of-service gratuity upon termination of his service.”
Before you could even file a claim for your end-of-service benefit, you need to know first how this is calculated depending on the type of contract that you have.
There are two types of contract being used in the UAE: a limited and an unlimited contract.
A limited contract is a “fixed term” contract, wherein an employee agrees to work with an employer for a specific period of time. In the event that the employee decides to resign before the specified “end date”, he/she might be subject to a labor ban, or in some cases, may even be required to settle a payment to the employer.
An unlimited contract, on the other hand, is one that does not tie an employee to their employer for a specific period of time. In this case, the employee must only provide a one-month to three-month’s notice before resigning or terminating their contract.
Whatever case you belong in, you need to know how to calculate your gratuity pay so that you won’t get into any trouble with the law or any misunderstandings with your employer when your contract ends.
How to Compute Your Gratuity Pay
1. For Limited Contracts:
Under a limited contract, an employee who was able to work for one or more years in continuous service is entitled to gratuity pay upon the end of their service, which is calculated based on the following conditions:
- If the employee has worked for an employer for less than a year, he/she will not be entitled to any gratuity pay.
- If the employee has worked for the company for more than one year but less than five years, he/she is entitled to full gratuity pay based on 21 days’ salary for each year of service.
- If the employee has worked for the company for more than five years, he/she is entitled to full gratuity pay based on 30 days’ salary for each year of work after the first five years.
- In all of these cases, the total gratuity pay will not exceed the salary of two years.
2. For Unlimited Contracts
Meanwhile, employees under an unlimited contract shall compute heir end-of-service pay as follows:
- If the employee has worked for an employer for less than a year, he/she will not be entitled to any gratuity pay.
- If the employee has worked for the company for more than one year but less than five years, he/she is entitled to full gratuity pay based on 21 days’ salary for each year of service.
- If the employee has worked for the company for more than five years, he/she is entitled to full gratuity pay based on 30 days’ salary for each year of work after the first five years provided that the amount does not exceed the salary of two years.
However, if an employee decides to resign, the gratuity pay shall be computed as follows:
- If the employee resigns before completing one year of service, he/she will not be entitled to any gratuity pay.
- If the employee has worked under an employer between one and three years, he/she will be entitled to one-third of 21 days’ basic salary as end-of-service pay.
- If the employee has worked under an employer between three and five years, he/she will be entitled to two-thirds of 21 days’ basic salary as end-of-service pay.
- If the employee has worked under an employer for more than five years, he/she will be entitled to a full 21 days’ basic salary as end-of-service pay.
How to Claim Your Gratuity Pay
If you have lost your job amid the pandemic due to business reasons (e.g. the company shut down or had to reduce their number of employees) or have lost your job while you were outside the UAE because you were unable to return on the agreed date due to travel restrictions, you can still file a claim for your gratuity pay if you qualify under the conditions stated above based on your contract.
To file a claim, you need to create a written request addressed to your employer requesting them to transfer your end-of-service pay to a bank outside of the UAE. Your request should include your bank account details as well as the final settlement account.
Important: Meanwhile, as you process your request for your gratuity, you should also be coordinating with your bank in the UAE to close your account. Doing so will help you avoid problems related to “dormant” or inactive accounts as these could pile up charges without you using it after you’ve left the UAE.
Frequently Asked Questions:
- Can deductions be made from my gratuity pay?
Yes. As per Article 135 of the UAE Labor Law, if a worker has unpaid loans or an unsettled balance with his/her employer, the amount may be deducted for the employee’s gratuity pay.
- What are the reasons to not receive a gratuity pay?
Article 139 of the UAE Labor Law states that a worker may not receive gratuity pay if he/she: (a) is dismissed from service for any of the reasons specified in Article 120 (e.g. adopting a false identity, forging of documents, etc.); and (b) leaves the job of his own accord and without notice.
DISCLAIMER: The guide presented is for information-sharing purposes only. To know more about Gratuity Pay or end-of-service benefits in the UAE, visit the UAE Government Portal.
Despite the challenges presented by the ongoing global health crisis, it is still possible to claim your end-of-service pay even if you are outside the UAE as long as you are able to communicate clearly with your employer and provide all the necessary letters or documents. When you know your rights as an employee, even if you’re already outside of the UAE, making work-related claims, especially when payment is involved shouldn’t cause you any problems.
