COVID-19: Job loss after salary cut: What is my gratuity?

If you have just faced a temporary salary cut, what happens if you go on to lose your job?

This was the question raised by a Gulf News reader.

Gulf News spoke with Dr Hassan Elhais, who is a legal consultant based in Dubai.

The ministerial decree no. 279 of 2020 lays down the process companies can follow if they have been negatively affected by COVID-19. Read more here: https://gulfnews.com/1.1585578422824

Article 3 of the decree provides details on the steps an employer can take if the company has been negatively affected by COVID-19.

It allows the employer to negotiate a temporary or permanent salary deduction.

For temporary reduction of salary, it needs to be implemented through an appendix in the employee's labour contract.

If the salary cut is extended, the appendix, too, should be renewed.

This appendix would state whether the salary cut would affect the employee's end of service benefits.

Picture used for illustrative purposes only.

Picture used for illustrative purposes only.

Dr Elhais had observed that the appendix to the labour contract for temporary reduction in salary includes the provision that such reduction in salary shall not affect the end of services benefits.

With temporary salary cuts, as the appendices are prepared by the Ministry, it should not affect your end-of-service benefits.