Saturday, 31 May 2014
Gratuity and End of service settlement (UAE)
Dear ones,
Just to share some details about UAE gratuity settlements
and end of service settlements.
Rules completely depends to what type of Labor contract you
have. There are two types of contract in UAE:-
1) Limited Contract 2 ) Unlimited Contract
1) Limited Contract 2 ) Unlimited Contract
1) Limited Contract
The one who hold limited contract, his / her contract will
be for a shorter period of 2 years which can be renewed for the same period
later. Those on this contract will not have any rights for gratuity until they
finish a minimum period of 05 years. After 05 years, whenever they want to
leave the company; they will be entitled to get 30 days of basic pay for each
year they worked.
Employee's last 03 months basic pay should be taken for the
calculation of Gratuity. ( Not what typed in your labor contract)
For example If the person worked for 6 yrs and decided to
leave company. His monthly salary for last three months was 6000 Dhs and his
basic pay was 3000 Dhs; If so he will be entitled to get AED 3000 x 06 Years =
18000 Dhs as his gratuity and one way airfare allowance/ flight ticket to his
home country.
That will be his end of settlement.
(Plus any pending annual vacation days+ payable overtimes..etc all should paid as cash)
That will be his end of settlement.
(Plus any pending annual vacation days+ payable overtimes..etc all should paid as cash)
On Limited Contract- Employee can leave the company with a
notice for immediate effect while he should pay 45 days of his basic pay as
compensation. else he has to give 30 days notice period (Some companies are
charging both together to staff which is against the law- Either notice period
or 45 days basic pay as compensation- only one should charge to employee) and staff
is entitled to get salary for notice period - no free service required!!
2) Unlimited Contract
This contract is starting with a date without an end date.
Whoever complete 2 years on this contract will be entitled to get their
gratuity. This also will consider basic pay depends to last 3 months salary (
not to what typed in labor contract).
* Who completed 24 months will get 7 days of basic pay for
each year they worked
* Who completed more than 24 months and upto 36 months will get 14 days of basic pay for each year they worked
* Who completed more than 36 months and upto 60 months will get 21 days of basic pay for each year they worked
*Who completed more than 60 months will get 21 days of basic pay for each year they worked upto 5 years and remaining years will be 30 days of Basic Pay.
* Who completed more than 24 months and upto 36 months will get 14 days of basic pay for each year they worked
* Who completed more than 36 months and upto 60 months will get 21 days of basic pay for each year they worked
*Who completed more than 60 months will get 21 days of basic pay for each year they worked upto 5 years and remaining years will be 30 days of Basic Pay.
**All the people for above category will get one way flight
ticket to their home country with gratuity settlement.
(plus pending annual vacation + pending overtime settlement everything should pay as cash)
(plus pending annual vacation + pending overtime settlement everything should pay as cash)
For example if the person's basic pay is AED 3000
who completed 24 months = 3000/ 30 Days x 07 Days = 700 Dhs
x 02 years = AED 1400 + One way Airfare
more than 24 months upto 36 months = 3000/30 Days x 14 Days
= 1400 Dhs x ___ Years = ____ + One way Airfare
More than 36 months upto 60 months = 3000/30 Days x 21 Days
= 2100 Dhs x ____ + One way Airfare
More than 60 months = AED 3000/30 Days x 21 Days = AED 2100
Dhs x 05 Years + AED 3000 x ___ (Remaining time after 5 years) + one way
ticket.
*********************
On Unlimited contract - employee has complete freedom to
leave the company anytime with a 30 days notice. Company has no right to charge
any amount to employee as any compensation for visa/ labor card..etc and they
should have to settle all gratuites as mentioned above.
"ON BOTH CONTRACTS IF EMPLOYEE HAS ANY PENDING
VACATIONS DAYS- THEN THEY CAN CONSUME EITHER WITH THEIR NOTICE PERIOD OR THEY
SHOULD GET IT CASHED"
NO COMPANIES IN UAE CAN MAKE THEIR OWN LAW... WE HAVE ONLY
ONE LAW FOR ALL COMPANIES AND ALL SHOULD FOLLOW IT.
if any company tried to make any troubles to employee upon
their resignation; please proceed to Labor department and they will do
everything well for you.
************************************************************
***
In the matter of TERMINATION (FIRED) the law sate as follows:-
************************************************************
***
In the matter of TERMINATION (FIRED) the law sate as follows:-
On the termination of the employment contract, an employee
is entitled to the following:
A notice period, or any amount due in lieu of the notice
period in the case of an unlimited contract.
In the case of an unlimited contract, compensation for unreasonable dismissal if the contract was terminated by the employer for unreasonable cause. (21 Days of basic Pay for the each year they worked - for ex: if the person worked for 1.6 yrs it should calculated as 21 days for one year and 10.5 days for 6 months = 31.5 days)
In the case of an unlimited contract, compensation for unreasonable dismissal if the contract was terminated by the employer for unreasonable cause. (21 Days of basic Pay for the each year they worked - for ex: if the person worked for 1.6 yrs it should calculated as 21 days for one year and 10.5 days for 6 months = 31.5 days)
In the case of a limited contract, compensation equivalent
to the period until the end of the contract, or three month’s wages (Basic
Pay), whichever is shorter.
Payments equivalent to the balance of non-utilized leave or
any part thereof.
Payments for overtime or any balance of wages due and not yet paid.
End of service gratuity calculated on the duration of the employment.
Repatriation expenses as per the Law or the employment contact, subject to the employee not being in violation or in breach of either the Law or the employment contract.
Payments for overtime or any balance of wages due and not yet paid.
End of service gratuity calculated on the duration of the employment.
Repatriation expenses as per the Law or the employment contact, subject to the employee not being in violation or in breach of either the Law or the employment contract.
************************************************************
************
All the best
************
All the best
hope the information are clear to all
Best Regards
Malik Muhammad Ashiq
Friday, 30 May 2014
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