Coronavirus: salary cuts imposed during outbreak will not affect end of service gratuity

The Ministry of Human Resources and Emiritisation confirmed workers will be entitled to settlements based on pay conditions prior to the pandemic

Salary cuts during the Covid-19 outbreak will not affect the end of service gratuity according to the Ministry of Human Resources and ‎Emiratisation‎. Getty Images

Salary cuts imposed due to the Covid-19 outbreak will not affect end of service gratuities for workers, officials confirmed.

The Ministry of Human Resources and Emiratisation said employees who lost pay and were subsequently dismissed during the pandemic would have financial settlements based on their contracts prior to any reduction.

Employees who have completed at least one year of service in an organisation are entitled to an end-of-service gratuity, according to UAE labour law.

The amount is calculated based on the number of days worked while the days of absence from work without pay will not be included.

Employees should be compensated with 21 days of pay for each of their first five years of service and 30 days for every additional year. The maximum gratuity should not exceed two full years' pay.

The ministry introduced new legislation in March setting out the rights of employers and employees during the pandemic.

The authority said the measures - including temporary and permanent reductions in salaries and issuing unpaid leave - must be agreed upon by employers and non-Emirati employees alike.

In the case of a permanent salary reduction, the employer must obtain the ministry's approval.

“If employers are facing difficult times, then it is important to consult with employees and ensure that they are on board and fully understand the rationale behind why they are looking to take such measures,” said Shiraz Sethi, regional managing partner and co-head of employment at law firm DWF Middle East, at the time.

The Ministry has said end of service gratuity will be calculated based on the employee’s last pay before the salary reduction.

A woman wearing a protective face mask rides her scooter on the streets of Abu Dhabi. Pawan Singh / The National

Employees at Future Tyres Trading in Al Quoz, Dubai. Reem Mohammed / The National

Dubai residents enjoy access to Kite Beach in Jumeirah with the Covid-19 precautions in place. Antonie Robertson / The National

Residents soak in the sunshine at Kite Beach in Jumeirah, Dubai. Antonie Robertson / The National

Dubai's reopened beaches have proved a hot spot for visitors eager for respite from weeks spent indoors. Antonie Robertson / The National

Cricket net practice returns in Jebel Ali, Dubai. Chris Whiteoak / The National

A cricketer disinfects the stumps. Chris Whiteoak / The National

A young cricketer bowls a delivery in a net session. Chris Whiteoak / The National

A woman wearing protective face mask as a preventive measure against the spread of coronavirus boards a bus in Abu Dhabi. Pawan Singh / The National

People wearing face masks board a bus in Abu Dhabi. Pawan Singh / The National

Safety guidelines are displayed at popular visitor attractions such as Kite Beach in Dubai. Antonie Robertson / The National

Safety warnings ensure beach-goers in Dubai remain on guard. Antonie Robertson / The National

Operators at their desks at Dubai's Covid-19 Command and Control Centre at Mohammed bin Rashid University. AFP

Operators at their desks at Dubai's Covid-19 Command and Control Centre at Mohammed bin Rashid University. AFP

Emiratis with their protective masks at Mohammed bin Rashid University in Dubai. AFP

The confirmation came after the authority responded to an inquiry sent by an employee who was laid off after one month after a 30 per cent pay cut was implemented.

In April, a senior judge said that UAE companies must continue to pay staff their housing allowance if they are made redundant.

Abdulla Al Nuaimi, head of the Abu Dhabi Labour Court, reiterated that federal legislation brought in late last month guaranteed workers their rent would be covered if they lost their jobs.

The ruling is designed to prevent tenants facing an uncertain financial future being evicted by their landlords.