Shift in UAE employee’s department does not change gratuity amount
I joined a company on March 17, 2013 and resigned on August 31 this year. I changed my department in March this year, and the company has only paid me my end of service gratuity up until the middle of March. This was less than three years by just three days. I asked for the full amount, but they refused. They are now saying I am not eligible for any further payment as I was only in my current role for six months and that I was also on probation after changing department. They are also saying the amount they paid me did not include annual leave payments and that there will be more deductions in my final pay, even though I have built up 13 days of annual leave. Does this sound right and is there anything I can do about it? NM, Dubai
There are a few issues here. Moving to a different department within a company is still counted as continuous employment and a person cannot be put on probation in this way. This is made clear in Article 37 of UAE Labour Law which states: “Appointment of the employee on probation basis in the service of one particular employer may not be made more than once. However, if the employee passed the probationary period satisfactorily and remained in service, such period of service shall be computed in the period of his service.”
The idea of the end of service gratuity is that it is paid to the individual when they actually leave employment and not piecemeal if they change role. I am not sure what NM means by referring to less than three years’ service when the interim payment was made, as the payment should be made pro-rata in respect of partial years of service.
This is per Article 133: “The employee shall be entitled to end of service remuneration in respect of fractions of the year payable pro rata to the time actually worked provided that he has completed one year of continuous service”. Upon fully leaving service he is entitled to be paid a gratuity based on his current salary for the full period of service, less any amount paid as an interim payment, plus any days of holiday accrued but not taken.
The standard amount payable as end of service gratuity per Article 132 of the law is “twenty-one day’s pay for each year of the first five years of service”, but as NM has resigned the amount is reduced per Article 137: “If the period of his continued service is more than three years and less than five years he becomes entitled to 2/3 of the said gratuity”. In respect of annual leave that has built up Article 79 of Labour Law applies: “The employee is entitled to receive cash in lieu of annual leave days not availed by him if he was dismissed or if he left the service after the period of notice stipulated by law”. If the employer is not abiding by the law, then NM should register a case with the Ministry of Labour.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at email@example.com. Follow her on Twitter at @FinancialUAE.
The advice provided in our columns does not constitute legal advice and is provided for information only.
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Published: September 30, 2016 04:00 AM