Will I receive less UAE gratuity for resigning before three years?

The Abu Dhabi resident, who knows her position may be cut soon, asks if her pay out will be better if she takes redundancy or resigns

The reader is on an unlimited contract, so her gratuity will differ depending on which option she decides to take. Photo: istockphoto.com
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I have worked for my employer for nearly three years and because I know my job will be made redundant soon I thought I would resign to make my resume look better. I spoke to the HR department who told me if I resign before the end of three years' service my gratuity will be much less. Is that right? It seems unfair, as three years is not a short amount of time. GB, Abu Dhabi

Anyone on a fixed-term contract that resigns with fewer than five years of service would forfeit their entire end of service gratuity. However, GB is on an unlimited contract, which is treated differently. While she will receive a reduced gratuity payment if she resigns, there is no reduction if she is made redundant. This is covered in Article 137 of UAE Labour Law which states: "Should the worker bound by an employment contract with undetermined term leave his work by his own choice after a continuous service of one year at least and three years at most, he shall be entitled to one-third of the end of service gratuity …"

The standard accrual is 21 days for each year of service, up to five years, so if GB resigns, the payment would reduce to just seven days per year of service, with a pro-rata calculation for partial years. There is little stigma for being made redundant these days, so she may want to reconsider her position unless she has a new job to go to as she will receive the standard 21-day gratuity payment if she she chooses redundancy over resignation.


Read more from Keren Bobker:

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Repatriation is not an obligation if an employee resigns


I work as a cashier and have been with the company for one year. I want to leave but the company is asking me to pay Dh5,000 for my visa cancellation. My salary is only Dh1,500 so this is not possible. Can you help please? BS, Abu Dhabi

When an employee leaves a job, they should never be asked to pay for any fees incurred by the employer. This is clearly set out in Ministerial Order 52 of 1989, Article 6, which states that the employer is responsible for all recruitment and employment expenses. BS’s employer is not permitted to ask him to pay any such fee and he needs to contact the Ministry of Human Resources and Emiratisation (MoHRE) on 800 665 or go to his local labour office to register a case. The ministry will then intervene to ensure he is not made to pay any such charges.

I have been an Etihad Airways frequent flyer and a National Bank of Abu Dhabi (now First Abu Dhabi Bank) customer for some years. I was attracted by the NBAD Etihad Infinite credit card perks and decided to apply for one. My application was accepted and was issued with a NBAD Etihad Guest Infinite credit card, which automatically entitled me to receive 55,000 Etihad Guest miles as a welcome bonus. I also took out a supplementary card that gave me an additional 5,000 Etihad Guest miles. They also stated that I would receive 7.5 Etihad Guest miles for every Dh10 spent on purchases. I spent Dh80,000 on the credit card and in May this year, I decided to repay the credit card in full and have the account closed. Unfortunately, to date I have not received any of these miles. I have contacted the bank numerous times to have this resolved but every time they say I will receive it at the end of the month but to no avail. Can you help me bring closure to this? RN, Abu Dhabi

Upon receipt of the query, I contacted First Abu Dhabi Bank in October and they advised they would look into the matter. Two and half weeks later a spokesman for the bank said: "FAB supports the growth ambitions of its stakeholders and goes beyond financial products and services, and as such, we are grateful for all customer feedback as we strive to consistently deliver the highest standards of service. The bank has been in contact with RN, and informed him that any eligible miles will be credited in due course."

Several weeks later, no miles had been received so I followed up with the bank again. While I appreciate the bank has been going through organisational changes, trying to get RN what is due has been a long and drawn out process. Finally, on January 17, three months after the issue was raised, I received confirmation that the miles had finally been added to the account. RN has confirmed that, at the time of writing the column, he has received approximately half the airmiles due and I hope FAB will ensure that his remaining entitlement is paid promptly.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than
20 years’ experience.

Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only