Thursday, December 16, 2010

End of service - Employees in UAE

The End of Service Gratuity: from Article: 132 Labour Law UAE
1. How the End of Service Gratuity is determined? From Article: 132:

The worker deserves the End of Service Gratuity if he completed one year or more in the service…and it shall be calculated as follow:
A- 21 days for each year from the first 5 service years
B- 30 days for each year if his service years have exceeded the same.
However, the total End of Service Gratuity should not exceed the salary of two years.

2. Shall the leaves without pay be calculated within the service period? Article: 132:
The period of leaving the work without pay shall not be included within the service period.
3. I have worked with my employer for two years and 5 months…, shall the End of Service Gratuity be calculated for the parts of years? Article: 133:
The worker shall have the right to have the End of Service Gratuity for the part of the year if he has completed one year of service or more.
4. Shall the End of Service Gratuity be calculated for the total salary? Article: 134:
The End of Service Gratuity shall be calculated according to the last salary, (Basic) obtained by the worker…, this shall be true for all workers getting their salaries on monthly, weekly or daily basis…, and shall be calculated based on the average salary forworkers receiving their salaries based on piece. So the allowances shall be included in the basic salary, such as: the accommodation allowance, transportation, overtime and other allowances…………etc.
* Important: A worker who receives his salary on piece…,e.g. He may receive DHS. 1000 for the piece…,
or DHS. 500 for the piece…, in this case the average salary only should be calculated, i.e. * His total salary for 6 months…, to be divided over 6…to obtain the average salary: Total salary for 6 months = 25000/6 = DHS. 4166 which is the average salary
5. If a worker died, shall his employer pay his End of Service Gratuity? Article: 136:
If the worker died, his employer must pay his End of Service Gratuity to his hires.
6. I have worked with my employer for the year 1975, i.e. before the issuance of the Labor Law in 1980; shall I have the right to claim for the End of Service Gratuity for my service period with my employer before the issuance of the Federal Labor Law in 1980? Article: 136:
The worker shall not be entitled to have the End of Service Gratuity for the period before the issuance of the Federal Labor Law in 1980 unless the worker was a national citizen.
* The Unlimited Period Contract: In case the worker has ceased working:
7. Kindly show how can the End of Service Gratuity be calculated if the worker has ceased working when he is employed under unlimited Period Contract? Article: 137:
1- If the worker’s service period is not less than one year and not exceeding 3 years, he shall be entitled to have 1/3 the value of End of Service Gratuity, i.e. 7 days in each year.
2- If his service period has exceeded 3 years but less than 5 years he shall be entitled to have 2/3 the value of End of Service Gratuity, i.e. 14 days in each year.
3- If his service period has exceeded 5 years he shall be entitled to have 21 days as a value of End of Service Gratuity for each year of service.
* And if the service period has exceeded 5 years he shall have 30 days as End of Service Gratuity for each year of service.
* Example:I have worked with my employer for 2.5 years, how can my End of Service Gratuity be calculated, knowing that I have ceased working on my own will, and I have unlimited period contract with a salary of DHS. 1500?If the service period does not exceed 3 years, this worker shall have 7 days End of Service Gratuity for each year of service…parts of the year shall also be included, i.e. The two years shall be multiplied by the Gratuity’s days: 7x2 = 14 days - In case the employer has dismissed a worker of an unlimited period contract without reason after completing one year of service…, such worker shall have the right to receive 21 days End of Service Gratuity for each year:
* Example: - If the worker has worked for 3 years and 7 months and his employer has then dismissed him, such worker shall be entitled to have: - 21 days for each year if his service period didn’t exceed 5 years. - 21x 3 + 21/12x 7= 75 days
* Other Example: A worker of unlimited Period Contract was dismissed after completing 6.5 years of service , He shall be entitled to have an End of Service Gratuity of: 21x5+ 30+30/6 = 105+ 30 + 15 = 150 days, whereas 21 days were calculated for the first 5 years…, and 30 days each year for the above to this.

* TheLiimited Period Contract: - In case the worker has cancelled his labor contract: Article: 138:

If the worker has willingly ceased working before completing the contract period…, he shall not be entitled to have the End of Service Gratuity…, unless his service period has exceeded 5 years.

* Example: A worker with a limited period contract which has commenced on 4/4/2004 and expired on 3/4/2007, he has submitted his resignation letter on 25/5/2005 and before completing the contract period, the worker has cancelled the contract, such worker shall not have the right to receive the End of Service Gratuity.

* Example: A worker with limited period contract which shall start on 4/4/2001 and expires on 3/4/2004. This contract was renewed for further 3 years ending on 2/4/2007. This worker has submitted his resignation letter on 20/11/2006…, in this case the said worker shall be completing 5 years and 7 months of service. Then he shall have the right to receive the End of Service Gratuity as provided for in Article: 138. This because his service period has exceeded 5 years * 5 x 21 + 30/12 x 7 = 105 + 17 = 122 days

* In case the employer has cancelled the labor contract: In this case the worker shall have the right to receive an End of Service Gratuity if his employer has dismissed him without reason, in amount equal to 21 days for each year provided that he has completed one year of work, and 30 days for each year if his service period has exceeded 5 years.

8. When shall the worker be banned from having the End of Service Gratuity? Article:139:
The worker shall be banned from having the End of Service Gratuity in two cases: * If the worker was dismissed from the service for any reason set forth in Article: 120 of the labor law…, or if he left the work for the purpose of avoiding dismissal for the same reason
* If the worker has willingly ceased working without notice…, and for reasons other than those shown in Article: 121 of the law, and if he is working under unlimited period contract…, or if he didn’t complete 5 years of service with regard to the limited period contract…, and submitted his resignation letter.

9. I have worked with my employer…, whereas present in the establishment a box called the “saving box” in which the employer was used to put in it an amount of money for the account of the workers as an End of Service Gratuity…, in case I have reached my end of service period, shall I deserve to have from such amount? Article: 140:

* The worker shall have the right to receive from this amount, if the employer is depositing the same in the saving box against his legal obligation towards the End of Service Gratuity…, and if it was stipulated in the saving box as such.

* The worker shall have the right to receive What he was entitled for from the saving box in addition to the End of Service Gratuity if the saving box didn’t stipulate that What was deposited by the employer in the said saving box is against the employer’s legal obligation towards the End of Service Gratuity.52. I am working in an establishment, in which the system of pension and insurance is adopted…, in case of my end of service; shall I have the right of option between having the pension and the End of Service Gratuity? Article: 141:

According to Article: 141: The worker may chose between having the pension and the End of Service Gratuity or to have his dues in the pension or insurance box or whichever preferred to him…, (except with regard to nationals, whereas the Pensions and Insurance Authority’s terms shall be valid wherefore)…, Law No. 7 for the year 1999 regarding Social Pensions and Insurances.

Return Tickets
* The return tickets shall be in the worker’s account if he resigned without reason before the expiry of the limited period contract or resigned with respect of the unlimited period contract.
* The return tickets shall be in the employer’s account if he dismissed the worker, without reason or cause provided for in Article: 120
* The return tickets shall be in the employer’s account if the worker has completed the limited period contract.

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