# End of Service



## judicious (Oct 22, 2008)

Howdy!

Now I know that this this question has been asked a million times before but I was just needing a little clarification on the gratuity to be paid.

I understand that 21 days are to be paid per year worked if you have worked more than one year and up to 5 years and thereafter 30 days a year but the whole amount must not exceed 2 years salary.

The question is:

If I am the one who handed in my notice or resigned for any reason should I still receive 21 days a year or only 7 days as some people say. Also nothing is mentioned in the contract regarding the end of service benefits or gratuity.

Your help is much appreciated! :clap2:


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## neetaad (Jun 30, 2010)

judicious said:


> Howdy!
> 
> Now I know that this this question has been asked a million times before but I was just needing a little clarification on the gratuity to be paid.
> 
> ...


Hi 
are you on a limited or unlimited contract , pls check that first . In unlimited contracts it is 7 days basic salary for the first three years , then 3- upto 5 years 14 and then 21 days . 
for limited contracts the rules are totally different , the best thing is to take your labour contract and go to labour dept they will giv eyou all the facts .


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## Gavtek (Aug 23, 2009)

It's 7 days (or the full entitlement divided by 3) if you tender your resignation.


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## Olliesmum81 (Jul 4, 2010)

Hi, I too would like a little help with this kind of thing pleaseeee....

I read over a contract for a job I was offered and my basic wage was half what my wage will be if i take the job, I asked about this and was told that there has to be a breakdown of additional things, eg. accomodation(which i dont need),transport allowance,medical(which said 250aed a month)!!!!! I wanted an inclusive salary so that gratuity would be taken on that! Any advice would be appreciated. Thanks. Oh and it says overtime unpaid! I also asked about that and was told that there never is any overtime to be done but it has to be written down! If I take the job and need to leave before the three year contract is up, what are the consequences????


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## Gavtek (Aug 23, 2009)

Most of that is fairly standard, although I think I'm right in saying that the employer has to provide the medical insurance at no cost to the employee. Most salaried positions don't have paid overtime. There aren't really any real unusual consequences of leaving your contract before it expires, I'm assuming there will be a termination clause in it that will explain the process.


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## Olliesmum81 (Jul 4, 2010)

Gavtek said:


> Most of that is fairly standard, although I think I'm right in saying that the employer has to provide the medical insurance at no cost to the employee. Most salaried positions don't have paid overtime. There aren't really any real unusual consequences of leaving your contract before it expires, I'm assuming there will be a termination clause in it that will explain the process.


......... 

During your employment with the organization, the company shall have sole discretion to terminate your services without assigning any reason whatsoever, giving one-month notice. The employee will however have to give the company two months prior notice before asking for resignation. The company is not entitled to pay salary to the employee if prior notice is not given.

The employee will be entitled to receive End of Service gratuity in accordance with the provisions under UAE Labour law, provided the employee has been in continuous service with the company for a period of not less than three years. Shall the employee wish to resign or her services are terminated by the employer for whatever reasons, before the end of this contract the employee shall reimburse all the expenses incurred for the visa, medical, ticket etc. and any other such expense incurred for making the employment visa of the employee back to the employer.

Is it the norm for no gratuity until three years have been worked, as I read somewhere else its 7 days after a year and 21 days after 3yrs!

thanks,

much appreciated.


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## Andy Capp (Oct 5, 2008)

Olliesmum81 said:


> .........
> 
> During your employment with the organization, the company shall have sole discretion to terminate your services without assigning any reason whatsoever, giving one-month notice. The employee will however have to give the company two months prior notice before asking for resignation. The company is not entitled to pay salary to the employee if prior notice is not given.
> 
> ...


That strikes me as incredibly onerous, basically they can sack you without reason 32 days prior to the end of your 3 year term, then claim back off you any and every cost you've incurred to them?

I'd be very surprised if the employers were allowed to do this.


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## Olliesmum81 (Jul 4, 2010)

Andy Capp said:


> That strikes me as incredibly onerous, basically they can sack you without reason 32 days prior to the end of your 3 year term, then claim back off you any and every cost you've incurred to them?
> 
> I'd be very surprised if the employers were allowed to do this.



Thanks for reply...yeah I know it all sounds a bit much to me and has left me wondering what to do as I tried hard to discuss it all and was told it hassssssss to be in there as does allowances that I dont need instead of an inclusive salary! Aww i'm rather fed up of it all to be honest!


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## Elphaba (Jan 24, 2008)

Gavtek said:


> Most of that is fairly standard, although I think I'm right in saying that the employer has to provide the medical insurance at no cost to the employee. Most salaried positions don't have paid overtime. There aren't really any real unusual consequences of leaving your contract before it expires, I'm assuming there will be a termination clause in it that will explain the process.


An employer only has to provide medical cover for employees on AD visas, not for anywhere else in the UAE.

-


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## Elphaba (Jan 24, 2008)

Olliesmum81 said:


> .........
> 
> During your employment with the organization, the company shall have sole discretion to terminate your services without assigning any reason whatsoever, giving one-month notice. The employee will however have to give the company two months prior notice before asking for resignation. The company is not entitled to pay salary to the employee if prior notice is not given.
> 
> ...


UAE labour law states that end of service gratuity is payable after one years's full service, so this contract is not valid in that respsect. No matter what it says, if the terms fall short of UAE law, then the UAE labour law is what must be applied.

You are also not legally obliged to reimburse the company for the cost of the visa (or their other costs) - that's illegal too.

Frankly they sound like a right bunch of charlatans, so I would not recommend that you work for people like this. 

-


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## Olliesmum81 (Jul 4, 2010)

Elphaba said:


> UAE labour law states that end of service gratuity is payable after one years's full service, so this contract is not valid in that respsect. No matter what it says, if the terms fall short of UAE law, then the UAE labour law is what must be applied.
> 
> You are also not legally obliged to reimburse the company for the cost of the visa (or their other costs) - that's illegal too.
> 
> ...


thanks very much for replies, any opinions are appreciated but yes I agree it all seems strange!!!!! hmmm,what to do!!


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## neetaad (Jun 30, 2010)

neetaad said:


> Hi
> are you on a limited or unlimited contract , pls check that first . In unlimited contracts it is 7 days basic salary for the first three years , then 3- upto 5 years 14 and then 21 days .
> for limited contracts the rules are totally different , the best thing is to take your labour contract and go to labour dept they will giv eyou all the facts .


hi if you have resigned some companies will pay you at 21 and some even at 7 days , the best thing is to go to your hr and ask them for a copy of the final settlement , pls just say i want to show it to my lawyer before cancellation of the labour card and the visa , watch it everything will be clear .if they are a normal company they wont hesitate otherwise they will say let us leave it . 
all the best


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## chay14ph (Nov 3, 2008)

For private company: 
less than a year no gratuity- sometimes you have to pay 1 1/2 year of your salary
2 years - 7 days
3 years - 14 days
5 years- 21 days
6 years and so-30 days.

Normally for freezone companies, its 21 days but still depend on the contract.


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## Guest (Jul 17, 2010)

I've come across the same bit of smoke and mirrors at my company in the UAE. I am two years into my three year residency visa, and while most of my experiences here have been positive, there are a few annoying snags I didn't foresee before coming. The biggest wrinkle is what I've seen posted earlier, the smoky "allowances" which are not technically a part of your base salary. They use this to cut your salaries when you take your annual leave. My allowances make up about 40% of my full salary. So when I do get my well earned holiday, I am only paid roughly 60% of my total monthly earnings. It's cheeky. It's sneaky. And it's never explained fully until you're here and earning a decent salary. 

As I approach my third year living in Abu Dhabi, I've already decided it will be my last. My contract is open, and I will give it the due diligence of fulfilling my residence visa. I am not enamored enough with local culture to extend, but that is a different post altogether. So far the experience has been wonderful, but I do hope exiting this country will be relatively stress free and with a nice end of service bonus. That being said, anyone care to comment on how to put in notice and the inevitable negotiations of the supervisor wanting to slap on a thicker pair of golden handcuffs? Thanks for reading.


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## Rutilius (Jan 22, 2011)

Reviving this thread as I have some questions on 'End of Service' Calculations

If you were in the 3rd year of employment (indefinite period contract) and are terminated in September (notice period of 30 days ending in October) would the following calculations be correct?
*Leave*
Leave entitlement for the entire year = 30 days
Leave availed till October = 28 days
Interpolated leave (based on 30 days per 365 day year) till October=24
Number of extra days availed = 4

Deduction of 4 leave days from End of Service Dues on the basis of (Basic + Housing Allowance) / 30 days

Does the calculation for leave involve the addition of living allowances into the calculation? Should I have had excess days of non availed leave, the employment contract states that the same would have been refunded based on the number of days X basic salary. 

It came as a surprise to me that they would deduct the 4 days from my end of service dues.

*Annual leave ticket*
Annual Leave Ticket Amount = V (V/365 = W per day)
Number of days till October = Y
Balance number of days remaining for the year = 365 - Y = Z
Deduction for balance days = Z x W

I would have assumed that the annual leave ticket when availed is not to be deducted as I was terminated and have not resigned.


*Living Allowance*
Annual Living Allowance = A (A/365 = B per day)
Number of days till October = C
Balance number of days remaining for the year = 365 - C = D
Deduction for balance days = D x B

This was paid in advance bi-annually. (I tend to lose out on my tenancy contract + pay a penalty) but the company calculates the balance number of days for the year and adds that as a deduction.

Is this all correct or are they ripping me off?


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## Rutilius (Jan 22, 2011)

Could anyone shed some light? I guess not many experience this, but I bet some of you Dubai Expat Veterans have changed jobs once in a while?


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## Vetteguy (Jan 3, 2010)

As far as your vacation days are concerned you might want to check your companies policies. Mine will only cash out 15 days and sick days are use or loose those are not concidered annual leave days ...
As far as your end of service entitlements are concerned you will only get your basic salary not your additional expenses and allowances as gratuity.....
You might want to get online and read the UAE Labor Law regarding this issue..... Good Luck..


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## Gavtek (Aug 23, 2009)

The Labour Law is quite vague with how the entitlement is actually calculated.

For example, when calculating the salary per day, most companies will try to use the monthly salary divided by 30, but if you work a 5 day week, then it should really be your annual salary divided by 261 (365 x 5/7).

As the law doesn't specifically state in detail how the gratuity is calculated, most companies can get away with these kinds of tactics.

For what it's worth, we wouldn't deduct anything for an annual flight being used but any holidays used over your pro-rata entitlement would be deducted from the total figure. We'd deduct the housing allowance if it had been paid in advance too. We used to hold the leases for all our employees but we got screwed over too many times so I put a stop to it.


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## Rutilius (Jan 22, 2011)

During the period that a residency visa is processed, isn't accommodation costs to be borne totally by the company with no deductions to the living allowance?


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## Gavtek (Aug 23, 2009)

Don't think so, if your contract states that you are to receive accommodation/living allowance, it will only be for the duration of that contract. Unless I'm reading your question wrong?


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## Elphaba (Jan 24, 2008)

Rutilius said:


> During the period that a residency visa is processed, isn't accommodation costs to be borne totally by the company with no deductions to the living allowance?


No requirement under UAE Labour Law. Depends entirely on your contract.


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## fcjb1970 (Apr 30, 2010)

End of service is at base salary. So if you get housing or other things described as 'allowances' in your contract, that is not included in gratuity calculation.

http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---ilo_aids/documents/legaldocument/wcms_125890.pdf

For all the details of everything you are entitled to (or not as the case may be). They can give you more than the labor law but not less.


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