UAE Labour Law: Things to know about shifts, leaves and wages

The Wages Protection System (WPS) is an important step to ensure and protect the rights of workers, and to establish trust between organisations and their employees. Under this system, salaries of employees will be transferred to their accounts in banks or financial institutions, which are authorised by Central Bank of the UAE to provide the service. For any concerns or complaints regarding the salary, employees can contact the MoHRE or lodge a complaint through eNetwasal.

End of service benefits

If the employee resigns of his or her own free will before completing one year, then they will not be entitled to any gratuity pay.

The worker is entitled to a gratuity for the served fraction of a year, provided that he completes one year of continuous service.

The end of service gratuity is calculated on basis of last wage which the employee was entitled to, namely the basic salary. Hence, it will not include allowances such as housing, conveyance, utilities, furniture etc.

If the employee owes any money to the employer, the employer may deduct the amount from the employee's gratuity.

Calculations for gratuity pay

1 Under limited contract

In the event where the employer terminates a limited contract, calculation will be as follows:

.   If an employee has served for less than 1 year, he is not entitled to any gratuity pay.

.    If an employee has served more than 1 year but less than 5 years, he is entitled to full gratuity pay based on 21 days' salary for each year of work.

.    If an employee has served more than 5 years, he is entitled to full gratuity pay based on 30 days' salary for each year of work.

2. Under unlimited contract

In the event where the employer terminates an unlimited contract, calculation will be as follows:

.    If an employee has served for less than 1 year, he is not entitled to any gratuity pay.

.    If an employee has served more than 1 year but less than 5 years, he is entitled to 21 calendar days' basic salary for each year of the first five years of work.

.    If an employee has served more than 5 years, he is entitled to 30 calendar days' basic salary for each additional year, provided the entire compensation does not exceed two years' pay.

In the event where the employee under an unlimited contract resigns, calculation will be as follows:

.    If an employee resigns before completing 1 year of service, he is not entitled to any gratuity pay.

.    If an employee has served between 1 and 3 years, he is entitled to one third (1/3) of 21 days' basic salary as gratuity pay.

.    If an employee has served between 3 and 5 years, he is entitled to two-thirds (2/3) of 21 days' basic salary as gratuity pay.

.    If an employee has served more than 5 years, he is entitled to full 21 days' basic salary as gratuity pay.