59A7D41EB44EABC4F2C2B68D88211BF4 UAE Visa Rules & Procedures - UAE Law Updates for 2025: Meena Business Services
Showing posts with label Meena Business Services. Show all posts
Showing posts with label Meena Business Services. Show all posts

Thursday, December 16, 2010

"UAE End of Service Gratuity (EOSG) 2025: New Calculation Rules and Contract Types"

๐Ÿ’ฐ UAE End of Service Gratuity (EOSG): New Calculation Rules and Contract Types (2025 Update)

The calculation and entitlement rules for the End of Service Gratuity (EOSG) have been entirely updated under the Federal Decree-Law No. 33 of 2021 (the New UAE Labour Law), effective from February 2, 2022.

1. The Core Calculation (Article 51)

The calculation method (21 days for the first 5 years, 30 days thereafter) remains, but the maximum cap is removed, and the calculation basis is confirmed.

Old Law (Article 132)

Current Law (Article 51)

Calculation: 21 days for the first 5 years, 30 days for subsequent years. Maximum Cap: Total gratuity cannot exceed 2 years' salary.

Calculation: Same rates apply. 21 days for the first 5 years, 30 days for subsequent years. Maximum Cap: REMOVED. The total gratuity is not capped at two years' salary.

Part of the Year: Entitled to a prorated amount after one year of service. (Article 133)

Part of the Year: Confirmed. The worker is entitled to a prorated amount for the fraction of the year, provided one full year of service is completed.

Leaves Without Pay: Not included in the service period. (Article 132)

Leaves Without Pay: Confirmed. Periods of unpaid leave are excluded from the service period calculation.

2. The Calculation Basis: BASIC Salary Only

The current law explicitly confirms the calculation basis.

Old Law (Article 134)

Current Law (Article 51)

Basis: Calculated based on the last basic salary. Confusing Point: Stated allowances "shall be included in the basic salary" (which was legally disputed).

Basis: Calculated exclusively on the Basic Salary. Clarified: The law confirms that allowances (housing, transport, commission, etc.) are NOT included in the gratuity calculation.

3. Contract Type Distinction: UNLIMITED is ABOLISHED

This is the most critical change. The distinction between Unlimited and Limited contracts for EOSG calculation is GONE because the Unlimited Contract type is abolished for new/renewed contracts.

Old Law (Articles 137 & 138)

Current Law (Article 51 & 42)

Unlimited Contract Resignation: Reduced Gratuity (1/3 or 2/3 reduction based on service period).

Fixed-Term Contract Resignation: NO REDUCTION. The worker is entitled to the full gratuity regardless of the length of service (after 1 year), provided they comply with the lawful termination (notice period).

Limited Contract Resignation: Forfeiture unless service exceeded 5 years.

Forfeiture: ELIMINATED. There are no reductions or forfeitures for an employee's resignation under the new law, provided they follow the lawful notice period.

4. Forfeiture and Dismissal (Article 51 & 44)

The conditions for the worker being banned from gratuity have been streamlined and simplified.

Old Law (Article 139)

Current Law (Article 51)

Forfeiture: Worker dismissed under Article 120 (gross misconduct) OR worker voluntarily resigns without notice (unlimited contract) OR limited contract worker resigns before 5 years.

Forfeiture: The worker forfeits the entire gratuity ONLY if they are dismissed for one of the 11 specific reasons listed in Article 44 (Gross Misconduct).

Voluntary Resignation: Forfeiture is ABOLISHED for lawful resignation.

5. Death, Savings, and Pensions (Article 51)

  • Death: Confirmed. If the worker dies, the employer must pay the full gratuity to the heirs.
  • Savings/Pension Funds (Article 140 & 141): Confirmed. The worker retains the right to choose between the gratuity or any better terms offered by a savings/pension scheme, provided the scheme terms allow it.

6. Return Tickets (Not in EOSG Law)

The obligation for return tickets is NO LONGER tied to the EOSG Law but to the general conditions of the employment contract (Article 13).

  • Current Rule: The employer is responsible for the worker's return ticket to their home country upon termination of the contract, unless the worker joins a new employer in the UAE, or the worker is dismissed for gross misconduct (Article 44 reasons).

 

Sunday, November 21, 2010

Termination of Unlimited Employment Contract in UAE- Frequently asked questions

Termination of the employment contract by worker: article (117).

1. I am employed under a labor contract of unlimited period, and I want to leave my Present job. What should I do?
This labor should submit his written resignation letter…And should mention in it that he want to work for a period of one month only, and this one month period shall represent the notice period fixed in one month.
2. I have terminated the service of one labor employed with me under a labor contract of unlimited period; do I need to give him a notice of one month?
Yes… because, based on Article No. 117, if the employer is desirous to terminate the service of any of his employees, he should do so in writing and should give him a notice of one month as per the law…except in case of termination pursuant to Article No.120
3. I am employed under a labor contract of unlimited period…and I receive my salary on per diem basis…, how can I send a notice to my employer in case I have submitted my resignation? Article No. 117
The notice can be send by per diem labors as follow:
1- If the labor has worked for a period exceeding 6 months and less than one year, he should sent a notice of (one week) to his employer.
2- If the labor has worked for a period not less than one year, he should send a notice of (two weeks) to his employer.
3- If the labor has worked for a period not less than five year, he should send a notice of (one month) to his employer.
* Example (1): A labor with a labor contract of unlimited period, who worked with his employer for a period of 7 months for a salary of DHS. 25/day…If such worker needs to resign, he should give a notice of one week to his employer commencing from the date of his resignation letter
* Example (2): A labor with a labor contract of unlimited period, who worked with his employer for a period of one year for a salary of DHS. 30/day…If such worker needs to resign, he should give a notice of two weeks to his employer commencing from the date of his resignation letter
*Example (3): A labor with a labor contract of unlimited period, who worked with his employer for a period of five years for a salary of DHS. 50/day…If such worker needs to resign, he should give a notice of one month to his employer commencing from the date of his resignation letter *Example (4): A labor with a labor contract of unlimited period, who worked with his employer for a period of three years for a salary of DHS. 20/day…If such worker needs to resign, he should give a notice of two weeks to his employer commencing from the date of his resignation letter
4. If the employer or the worker refused to receive the termination or resignation letters, how can we proof the same?
- Both parties should resort to the Labor Relation Department…As for the worker, he should continue in performing his duties in case he has submitted a compliant.
5. I have submitted my resignation letter to my employer, knowing that I am working under unlimited labor contract, do the said one month notice to be calculated within the total service period? Article No. 118
- Yes, such period shall be calculated within the total service period provided that the worker has actually worked within the said period
6. I have worked during the notice period of one month after I have submitted my resignation letter… And after the notice period has expired, my employer asked for an extension of the notice period without any reason. Shall he have the right to do the same?
The employer may extent the notice period after the worker has completed his work in that period, but the same should be under the consent of both parties.
7. I have submitted my resignation letter to my employer, knowing that I am working under unlimited labor contract besides, we have already, me and my employer agreed to reduce the notice period, what shall be my legal position in such a case?
The one-month notice period may neither be reduced nor may the month period be relieved from even if the same has happened under the consent of both parities… but the respite period may be increased, (the month notice)
8. How can the month notice allowance be calculated if the worker has submitted his resignation letter or if the employer has terminated the service of the worker…and the worker has already done his duties during the said period?
- It shall be calculated based on the last salary received by the worker.
* Example: A labor with a labor contract of unlimited period, and who worked with his employer for a salary of DHS.2000… but at present time, he receives DHS. 3000 as the employer has increased his salary- In this case, the worker shall have the right to receive the one month notice salary based on the last salary he received from his employer which amounts to DHS. 3000
9. I have worked with my employer for a period of one year under a labor contract of unlimited period, yet I have submitted my resignation letter… and I have worked during the notice period of one month, but it was stipulated in my labor contract that if I submitted my resignation, I should work for 3 month as a notice period…Do I need to be bound to such condition?

- Yes, the labor should be bound to the one month notice period, (3 months), if his contract so requires.

10. In case the worker has submitted his resignation letter, but he suddenly ceased working before completing the one month prescribed notice period, what shall be the legal action in this case? Article No. 119
 If the worker didn’t work during the notice period or if he didn’t complete the prescribed period…he should, in this compensate the employer with an allowance called: (the notice allowance) and this shall be through the last salary received by him from his employer.
11. In case the employer has terminated the worker’s unlimited labor contract and didn’t ask the said worker to work during the notice period…, or if he has reduced the notice period, then What shall be the legal action towards such case?
- If the employer has terminated the service of his employee, he should, in case he is not desirous to avail the work of his employee during the notice period, pay to the worker the one month notice period’s salary based on the last salary received by the worker. And in case the employer has terminated the service of his employee after the later has worked for a limited period from such notice period, then the employer should compensate his said employee for the remaining period.
* Example: The employer has terminated the service of his employee, whereas such employee has worked for 20 days from the one month notice period, but the employer has asked him to cease working…In this case, the employer has to compensate the worker also for the remaining period which amounts to 10 days.
12. A worker was terminated by the employer after the former has worked for 11.5 months…whereas the employer has paid him the value of the one month notice period, do such worker deserves the end of service gratuity?
The worker shall not have the right to obtain the end of service gratuity as he didn’t work during the one month notice period.
13. If the worker has submitted his resignation letter and was ready to work during the one month notice period…and the employer has waived such period, do such worker deserves the allowance of the one month notice period?
 Yes, he shall have the right to claim for the allowance of the one month notice period.

14. In case the worker has submitted his resignation letter and took a leave… or resigned during such leave period…shall the said one month notice period become invalid?
 No, it shall not become be invalid and the worker should work for the one month notice period.
15. May the employer terminate the worker without notice? Article: (120)
 Yes it is possible in some cases including:
1- If the worker has impersonated a false personality or nationality or if he has presented forged documents or certificates.
2- If the worker is still in the probation period and was dismissed within or at the end of such period.
3- If the worker has committed a mistake out of which a great loss has resulted to the employer…provided that such employer has already reported this case to the Ministry of Labor within a period of 48H from being informed by the incident.
4- If the worker has violated the work safety instructions or the work place, provided that such instructions were in writing and displayed in a prominent place.
5- If the worker hasn’t performed his main obligations as per the labor contract…and continue in so doing in spite of a written investigation made with him for this purpose and of noticing him not to repeat this violation, otherwise he shall be liable for termination.
6- If the worker has been finally adjudged by a competent court for a crime damaging honor, general morals or for breach of trust.
7- If he had disclosed the company’s confidential information.
8- If he was found drunk or using drugs during the work hours.
9- If he had assault his employer, the manager in charge or any one of his colleagues during the work hours
10- If the worker is absent without presence of reasonable cause, for: - More than discontinuous 20 days during the year.- More than 7 continuous days.
Note: In all the above cases, the employer should prove the occurrence of the relevant incident.
* Example: I have worked with my employer…and he has accused me for the crime of breach of trust…an investigation in the matter was carried out and as a result I was finally adjudged for a fine and imprisonment… ACCORDINGLY, the employer terminated my service…so I am claiming for the amount of the notice period and the compensation such termination.- The worker shall not have the right to have the amount of the notice period based on Article: 120 of the labor law as such worker was dismissed as a result of breach of trust…so the employer shall have the right to terminate him without notice.
* Example: I have been absent from duty for more than 7 continuous days…when I am back to work, my employer dismissed me without any reason… I am claiming for the amount of the notice period.- The worker shall not have the right to have the amount of the notice period if he was absent without reason for 7 continuous days… but if he has any reason, such as an approved sick leave, his employer shall not have the right to dismiss him.

16. If the employer is having a right to dismiss the worker without notice…, shall such worker have the right to leave the work without a notice? Article: 121:
 The worker may have such right in the following two cases:
* If the employer has violated his obligations before the worker with respect to the terms provided for in the contract and the law.
* If an assault had happened against the worker from the employer or from his representative.
Note: The worker should prove the occurrence of both cases.
* Example: I am working with my employer… but he didn’t pay me the salary of 3 months…so I have left the work…but my employer is claiming for the notice period?
The employer shall not have the right to claim for the notice period as he has violated the law and the labor contract based on Article: 121
17. My employer has dismissed me without any reason after I have passed the probation period… do such dismissal considered arbitrary? Article: 122
 If the employer has dismissed the worker, after the probation period without any reason, or if the reason of such dismissal has no connection with the work or if it is due to a complaint to the concerned authorities against the employer or for a case filed against the employer…then such dismissal shall be considered arbitrary.
18. If the employer has arbitrary dismissed me without presence of any reason and I am damaged due to the same…how can such damage and arbitrary dismissal be determined?
Article: 123 The competent court is the party which adjudge the employer to pay the compensation for the worker…and it is the party which estimate the value of such compensation as per the work nature and size of damage incurred by the worker in addition to his period of service…provided that the compensation value shall not exceed the salary of 3 months calculated on the basis of last salary received by the worker.
19. The employer has terminated my service due to the fact that I am not fit from the health point of view, shall he have the right to do the same? Article: 124:

 He may not have the right to do the same for health reasons before the worker has utilized all his legally due leaves. However any agreement or condition contrary to this Article shall stand null and void.

20 Can I have the right to obtain an experience certificate after I have spent my work period with my employer? Article: 125:
The employer should give the worker, on the basis of the later request, and at the end of his contract period, a free experience certificate…such certificate should include:
A- Date of joining the work
B- His contract expiry Date.
C- Total service period
D- Type of work.
E- Last salary obtained in addition of other entitlements, if any.
* The employer should also give back to the worker all his certificates, tools and equipment, if any.
21. I have worked with my employer, but he have sold the establishment for some other person…how can I obtain my work dues? Article: 126:- Based on Article: 126, the service shall be continuing even if the establishment was sold to any other person…both new and old employers shall be jointly responsible for a period of 6 months…and after this period the new employer should bear the responsibility alone.

* Example: An establishment was sold by the original employer to some other person, but the original employer didn’t settle the labors dues…then 3 months were elapsed since it was sold to the new employer…in this case both the new and old employers shall be jointly obliged to pay the workers dues…and after 6 months the new employer shall bear such responsibility alone.

22. I have signed the labor contract…whereas mentioned in the said contract a term which stipulates that after the expiry of my service or during suspension of my work, I should not work with any other competing company for a period of two years?
 Article: 127:- If it was agreed in the labor contract as such…then the worker should be bound to the same…and should not work with any competing company all through the period mentioned in the contract… provided that:
1- The worker should be of 21 years of age when the said contract was concluded.
2- To fix the time…e.g.: Not to work with any competing company for a period of two years from the date of cancellation.
3- To fix the place…e.g.: Not to work with any competing company in UAE…or any particular Emirate.
4- Type of work… e.g.: In the same company’s field of work… or the same job.
* Important:The condition of non- competition was not stipulated in the labor contract approved by Ministry of Labor, but it was mentioned in the labor contract concluded abroad or in the internal labor contract concluded between the two parties or in the work offer, do this be valid?

Monday, November 15, 2010

Employment Contract Termination: No More Penalty for Early Resignation Under New UAE Law"

The new Federal Decree-Law No. 33 of 2021 (the UAE Labour Law) fundamentally changed the rules for terminating fixed-term contracts (the replacement for limited contracts), particularly eliminating the statutory financial penalties for early termination.


๐Ÿšซ New UAE Law: Termination of Employment Contract (2025 Update)

The new UAE Labour Law (Federal Decree-Law No. 33 of 2021) has replaced the concept of "unjust dismissal" compensation and the automatic financial penalty for resigning early from a limited contract. The system now focuses entirely on the Notice Period.

1. Contract Type: Fixed-Term is the Standard (Article 8)

Old Law (Articles 115, 116)

Current Law (Article 8)

Limited Contracts and Unlimited Contracts were the two types.

All new contracts must be Fixed-Term (maximum 3 years, renewable).

Termination required penalties for non-compliance.

Termination is achieved by serving the mandatory Notice Period (30-90 days).

2. Employer Termination (Replaced Old Article 115)

The concept of a maximum 3-month statutory compensation for "unjust dismissal" under Article 115 is gone.

Old Law Rule (Article 115)

Current Law Rule (Article 43 & 47)

Compensation: If dismissed without reason (and not Article 120), the worker received up to 3 months' total salary (or the remaining contract period, whichever is shorter).

Compensation: Compensation for unfair or arbitrary dismissal is NO LONGER capped at 3 months. The amount is determined by the court, taking into account the employee's nature of work, duration of service, and the damage incurred, but the law no longer specifies the 3-month cap.

Notice: Limited Contracts had no mandatory notice period for employer termination.

Notice: The employer must provide the worker with a minimum of 30 days' notice for early termination, up to 90 days if stipulated in the contract.

3. Employee Resignation (Replaced Old Article 116)

The requirement for the employee to compensate the employer with 45 days' pay (or half of the last 3 months' remuneration) for resigning early from a limited contract is ABOLISHED.

Old Law Rule (Article 116)

Current Law Rule (Article 43 & 45)

Penalty: Employee paid a compensation penalty of up to 45 days' remuneration for early resignation.

Penalty: NO STATUTORY PENALTY. The employee's obligation is solely to give the employer the contractually agreed-upon written notice (min 30 days, max 90 days).

Compensation Basis: Compensation was calculated on Total Remuneration (including allowances).

Final Dues: Compensation is generally calculated based on Total Remuneration, but the focus is on payment in lieu of notice (if notice is not served), not a penalty fee.

4. Compensation for Personal Circumstances

Old Law Rule (Question 10)

Current Law Rule (Article 43)

Resignation for personal matters (new job/family issues) required compensation to the employer.

Resignation for personal matters (new job/family issues) ONLY requires the serving of the notice period. Compensation to the employer for contract breakage is eliminated, provided the notice is served.

Conclusion

The new law shifts the focus from financial penalties to contractual commitment via the notice period. If an employee or employer terminates the contract and serves the full notice period correctly, there is no compensation due to the other party (except for end-of-service gratuity and final salary). If they fail to serve notice, the compensating party pays the remuneration (Total Salary) for the remaining notice period.

 

Termination of Employment Contract in UAE – Frequently asked Questions

1. When the contract is terminated?

It is terminated in the following cases:

If both parties agree on its termination, provided that the worker's consent is given in writing, If the limited contract expires, unless tacitly or expressly extended. If the employer resigned the worker or the worker submitted his resignation in the unlimited contracts, provided that each of them shall notify the other according to the law.

2. Is the contract terminated by worker's or employer's death? - Article (114).

Employment contract shall not be terminated by employer's death, unless the subject of the contract is connected with his own person. But the contract is terminated by worker's death or his total disability, on a condition of providing an approved medical certificate for the same.

3. If the worker's disability is partial, is the employment contract terminated?

If the disability is partial, he can perform other works according to his health condition -an employer shall , according to a request from the worker , shall shift the worker to another position suitable to the worker .. and to pay him the salary given at such position.

* Example: a worker is injured.. His injury is partial as per a medical report.. The worker then requested from the employer to shift him from his current position (builder) to another one suitable with his health condition (guard) - there, the employer shall pay the worker a monthly salary of (guard ) , not a salary of his last position ( builder).