Dubai: When you are about to leave your job, but have been on a few unpaid leaves during your tenure at the company, how will your gratuity be calculated? A Gulf News reader wrote in asking the question.
He said: “I’m a projects manager and started working at a consultant’s office in Dubai in March 2015 and continued till March 2018. I was asked to go on an unpaid leave from March 2018 but then was requested to recommence work in April 2018. I continued working there till July 2020. Once again, in August 2020, I was asked to go on an unpaid leave until August 2023. Then in September 2023, I was asked to start working again and have continued working there till today. These repeated requests to go on unpaid leaves, which were sent to me via official letters from the company or emails, were due to lack of projects at site as well as the COVID-19 pandemic. However, during these unpaid leave periods, I was still part of the company’s workforce and they continuously renewed my visa. Moreover, during these unpaid leave periods, there were times when fellow employees were on vacation for a few weeks, so I was asked to cover their absence. Now, if I decide to leave the office, how will my gratuity be calculated? Especially since I have worked for the company for more than five years, but not continuously.”
What does the UAE Labour Law state?
Gulf News raised the query with Gloria Estolano, strategic partner at M&CO Legal who specialise in employment law, and they explained that for a worker to be entitled to severance pay, they must complete at least one year of continuous service.
She explained that as per Article 51 of the UAE Labour Law – Federal Decree-Law No. (33) of 2021, a foreign full-time employee who completes one or more years of ‘continuous service’ is entitled to a severance pay, which is calculated on the basis of the basic wage as follows:
a. 21 working days’ wage for each of the first five years of service.
b. 30 working days’ wage for each subsequent year of service.
According to the Labour Law, the basic wage is stated in the employment contract and is given to the employee in lieu of his work under the employment contract, whether on a monthly, weekly, daily, hourly, or piecemeal basis. The wage excludes any other allowances or benefits in kind, like accommodation allowance or commission.
How does the law define ‘continuous service’?
The Labour Law defines ‘continuous service’ as “an uninterrupted service with the same employer or his legal successor, from the service commencement date”.
Is the reader entitled to gratuity despite not working continuously with the company?
“As the employee has at all times been on his employer’s work visa since 2015 until the present, he has met the minimum one year of continuous service,” she said.
As the employee has at all times been on his employer’s work visa since 2015 until the present, he has met the minimum one year of continuous service.
So, how will the reader’s gratuity be calculated?
As per the UAE’s Labour Law, any unpaid leave is not counted as part of the total period of service.
“When calculating his severance pay, all days of absence from work without pay will not be counted nor included in determining his total period of service. However, the paid days he covered for his colleagues would be counted towards the number of days of continuous service.”
When calculating his severance pay, all days of absence from work without pay will not be counted nor included in determining his total period of service. However, the paid days he covered for his colleagues would be counted towards the number of days of continuous service.
She also clarified that in all cases, the end of service benefits for a foreign worker in the UAE’s private sector should not exceed two years’ of wages.
