UAE law: Understanding end-of-service benefits

If a worker signs a document saying, ‘all dues paid’ and then doesn’t get paid then the employee can still file a case against the company, according to experts at the Ministry of Human Resources and Emiratisation (MoHRE).

“If an employee signs a document saying, ‘all dues paid’ and does not receive his end-of-service gratuity or overtime or benefits, he can still approach the Ministry and file a case,” said Abdulla Alawadhi, legal researcher at MoHRE. “We do realise that sometimes the employee is forced to sign the document due to pressure by the company or without knowing what is written in the document.”

In such cases, the Ministry will then conduct an inquiry into the case. “We will look at proof whether the company has in fact transferred the required amount to the employee,” he said. “We will look at bank statements and other required documents. If we see that the company has not given the worker his dues, we will then pass a judgement accordingly. It does not matter that the employee has signed the document.”

End of service benefits for Emiratis working in the private sector will be in accordance with the legislation regulating the pensions and social securities in the UAE.

Labour Law:

As per Article 51 of the UAE Labour Law, end of service benefits for foreign workers working in the private sector will be as follows:

• 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 the basis of last wage which the worker was entitled to, namely the basic salary. Hence, it will not include allowances such ashousing, conveyance, utilities, furniture etc.
• If the worker owes any money to the employer, the employer may deduct the amount from the worker’s gratuity.
• All end of service entitlements must be paid within 14 days from the contract’s end date.

Abdulla Alawadhi further elaborated that the Ministry’s concern is always the welfare of employees. “The Ministry wants to ensure that the rights of the employees are protected,” he said. “Usually in the employee – employer relationship, the employee is seen as the weaker party.”

According to the amendments to a federal law pertaining to employment relations, MoHRE now has the authority to render a final judgement on any dispute if the value of the claim is not more than Dh50,000 and an amicable settlement has not been reached by both parties.

A separate amendment pertaining to domestic workers stipulates that any dispute that arises between a domestic worker and employee should be referred to MoHRE. The Ministry must then take all necessary steps to ensure that an amicable resolution is reached. If a resolution is not reached within two weeks of the complaint being filed, then it must be referred to a competent court. Similar to the employment relations law, MoHRE has the authority to render a judgement on a dispute if the value of the claim is not more than Dh.50,000.