# gratuity?



## Guest (Jun 5, 2011)

Hi,

I am in the process of exiting a company in the UAE. I've worked there for three years. I am supposed to receive my final payment, some expenses claimed, and something the accountant called "gratuity" if my employment was over a year which it was. 

Anyone with experience in this? What is this mystery sum? 

Thanks


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## Ogri750 (Feb 14, 2008)

For each year you complete (between 1 - 5 years), if you complete your contract or are terminated by the company, you receive 21 days pay. So for 3 years, this would be 63 days. This is only on your basic salary and does not include allowances.

Over 5 years, you receive 28 days pay per year, up to a maximum of 2 year's salary.

However, if you resign from a company, you would only receive a third of the gratuity.


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## Guest (Jun 5, 2011)

Thanks! Love your icon by the way. 

My contract was open. I resigned a couple of months before my visa ran out this summer and fulfilled the company's two month notice policy. Are you saying that resigning is economically worse than being terminated? That I'll get a third of 63 days? Hmm...or was receiving a third after 5 years and a resignation. That doesn't quite make sense, but I appreciate the fact you told me it's based on my base salary. Companies here sure don't advertise that fun little fact when they put out the carrot. Oh well. Been a good 3 years. Thanks!


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## ReggieDXB007 (Mar 10, 2011)

I am sure I saw a posting which had a detailed description of the gratuity calculation but of course I can't find it now. In any case, as Ogri said I believe that the applicable part of the law is this:

_Article 137

Where a worker under an indefinite term contract abandons his work at his own initiative after a continuous service of not less than one year and not more than three years, he shall be entitled to one-third of the severance pay provided for in the preceding article. Such a worker shall be entitled to two thirds of the said severance pay if his continuous service exceeds three years up to five years, and to the full severance pay if it exceeds five years._

I love the way that a resignation is equivalent to abandonment but perhaps that's just a poor translation.


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## Guest (Jun 6, 2011)

I love the way that a resignation is equivalent to abandonment but perhaps that's just a poor translation.[/QUOTE]


Thanks. That pretty much spells it out. Had I known that earlier I would have not honored the two month notice I just completed. My wife is pregnant and in another country so I'm leaving to help take care of her. This place can shove that two-thirds up its oil hole. Anyway, one-third is better than nothing. Thanks for the information.


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## ReggieDXB007 (Mar 10, 2011)

Sorry it has turned out like this for you. I hope everything goes well with the pregnancy and the new arrival - hope that you have at least some nice memories of this place to take with you.

Good luck!


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## Sparkysair (Jul 16, 2008)

ReggieDXB007 said:


> I am sure I saw a posting which had a detailed description of the gratuity calculation but of course I can't find it now. In any case, as Ogri said I believe that the applicable part of the law is this:
> 
> _Article 137
> 
> ...


Thanks for this answer Reggie; so if you resign you get a third or two thirds of the gratuity depending on if you've completed 3 years. If you're 'let go' in the sense that your contract is ended, you get the full gratuity like a redundancy pay out. What would happen if you're fired and is this UAE labour law that covers Dubai and Abu Dhabi or could Abu Dhabi be different?


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## Guest (Jun 6, 2011)

Thank you Reggie. I am not one to shoot the messenger...or anyone for that matter. It's been a great experience working here in the UAE for 2 years and 10 months. I see myself coming back to the Middle East now that I have had this positive experience. Thanks for the family well wishes. This is my first child. I'd like to be there of course.


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## ReggieDXB007 (Mar 10, 2011)

Sparkysair said:


> Thanks for this answer Reggie; so if you resign you get a third or two thirds of the gratuity depending on if you've completed 3 years. If you're 'let go' in the sense that your contract is ended, you get the full gratuity like a redundancy pay out. What would happen if you're fired and is this UAE labour law that covers Dubai and Abu Dhabi or could Abu Dhabi be different?


I am not a lawyer or HR person, so you'll need to apply your own interpretation of the law, unless an expert can come to our rescue here.

This was an excerpt from Federal Law No 8, For 1980, On Regulation of Labour Relations so applies to all Emirates I guess.

My intepretation is you either resign (i.e. your action) or you are asked to leave (fired, made redundant etc.) note the above clause applies to indefinite contracts.

The following applies to fixed contracts and the expiration of the term:

_Article 138

Where a worker under a definite term contract abandons his employment at his own initiative before the expiry of his contract period, he shall not be entitled to severance pay unless his continuous period of service exceeds five years._


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