I have worked in a company for three years on an unlimited contract. I now want to submit my resignation and return to my home country as the company is delaying payment of my salary and holding me responsible for a debt which has not been cleared by a client. I wish to know if my end-of-service gratuity will be calculated on the basis of 21 or 30 days? Under the UAE labour law, is the company entitled to hold my end-of-service benefits till the client clears the debt? Will the bonus, which is part of my pay package, be included while calculating my gratuity? My company claims that I am not entitled to a return ticket to my home country because I terminated the labour contract. If an employee terminates the labour contract, is he not entitled to a return ticket?

Article 132 of the UAE Labour Law states: “A worker who has completed a period of one or more years of continuous service shall be entitled to severance pay on the termination of his employment. The days of absence from work without pay shall not be included in calculating the period of service. The severance pay shall be calculated as follows: 21 days’ remuneration for each year of the first five years of service, and 30 days’ remuneration for each additional year of service provided that the aggregate amount of severance pay shall not exceed two years’ remuneration”.

As per the UAE Labour Law, the employer has no right to hold the employee’s end-of-service gratuity for the reason that the employee has to collect the company’s debt first. The employee is responsible for that only if he had made himself the personal guarantor for collecting the company debt. As per the UAE Labour Law, the bonus, which the employee received from the employer, is not included while calculating the employee’s gratuity. Finally, as per the Dubai Cassation Court, the employee is entitled to the air ticket in case he leaves the job and has not started working with a new employer regardless of the fact that he resigned from the job himself or had been terminated by the employer.


Annual leave

I’m working in a company in Dubai. Two years ago, I was recruited in this company as a salesperson with Dh6,000 plus commission as a monthly salary and later towards the end of the first year, I passed the requirement of the company and achieved more than my target and my salary was increased to Dh10,000. As per the labour contract, I am entitled to two months’ leave with pay every two years plus air ticket. After two years of continuous employment, my annual leave is now due and I applied for my annual leave. However, my employer calculated my leave salary as: the initial salary of Dh6,000 for the entitled annual leave in the first year of service; and the revised new salary (Dh10,000) for the second year. When asked for a clarification, the accounts department said this is what is applicable in the UAE Labour Law. Please clarify this on the basis of the UAE Labour Law. As per the UAE Labour Law, does the employer have the right to delay the employee’s annual leave, say for six months? In case the employee is requested to come back to work while he is on his annual leave, how is the salary calculated?

The law shall consider the salary last due to the worker in the calculation of the salary for the annual leave in accordance with the provisions laid down by the competent courts in this regard.

Article 76 of the UAE labour Law states that an employer may fix the date of commencement of annual leave and, if necessary, divide such leave into not more than two periods. Notwithstanding this, the division of leave shall not apply to the leave fixed for young persons.

Article 78 states that every worker shall be entitled to his basic wage and the housing allowance if applicable in respect of his days of annual leave where the circumstances of the work make it necessary for a worker to work during all or part of his annual leave. The days of leave during which he works are not carried forward to the following year, the employer shall pay him his remuneration plus a leave allowance in respect of the days worked at a rate equal to his basic wage.

It shall be unlawful in any circumstances to employ a worker during his annual leave more than once in two successive years.


Questions are answered by advocate Mohammad Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants.