Dubai: If you are terminated from your current job, but your company ends up offering you a new job on different contractual terms, how is your entire term of service calculated? More importantly, does it affect how your gratuity will be paid?
A Gulf News reader wrote in sharing his experience and wondering how his end-of-service settlement would be affected in such a situation.
He said: “I have been working in a company in Dubai for more than 30 years. Now, the company has terminated my services. I am over 65 years old. Subsequently, the company had given me a new agreement for six months (which will be over soon), with a gross salary, and barred all the benefits, even the health card. The cost of the health cards for my family and me have been deducted from my salary. My question is: What does the law say for calculating the gratuity for the extended period of six months? The employer refuses to pay for the gratuity for this six-month period, saying that it is a new agreement. I am working under the same company name throughout my service. I would be highly obliged for a quick response.”
Gulf News raised the query with Mohamed Elmasry, Associate at Al Suwaidi and Company, Advocates and Legal Consultants, who said that the gratuity calculation would depend on whether the service can be legally considered as continuous, as defined by Article 1 of the UAE Labour Law - Federal Law No. (8) of 1980.
In Article 1, which stipulates the legal definition of the terms referred to in the Labour Law, ‘Continuous service’ is referred to as follows: “Uninterrupted service with the same employer or his lawful successor from the date of commencement of the service.”
If the reader has not received his gratuity and the employer has not cancelled his visa, then the reader’s new six-month agreement will be added to his 30 years’ service period and the gratuity will be computed accordingly
The amended labour law – Federal Decree-Law No. 33 of 2021, which was announced in November this year and comes into effect from February 2, 2022 – also has a similar definition for the term ‘Continuous service’.
“Accordingly, we have to first determine whether the reader has already received his gratuity amount and the employer has cancelled his visa or not,” Elmasry said.
“In the first scenario – that is, if the reader has already received his gratuity amount and the employer has cancelled his visa – he will not be eligible to receive his end-of-service gratuity with regards to his new six-month agreement. This is because Article 132 of the UAE Labour Law (Federal Law No. (8) of 1980) states that, ‘The employee who has completed one year or more in continuous service is entitled to end-of-service gratuity at the end of his service”.
The upcoming labour law (Federal Decree-Law No. 33 of 2021) also states the same in Article 51 on severance pay. It states: “A foreign full-time worker who completes one or more years in the continuous service is entitled to a severance pay.”
Elmasry also clarified what an employee’s rights would be in case the service is continuous.
“In the second scenario, if the reader has not received his gratuity and the employer has not cancelled his visa, then the reader’s new six-month agreement will be added to his 30 years’ service period and the gratuity will be computed accordingly,” he said.
