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Are You Entitled to Gratuity If You Have Not Worked Continuously With a Firm?

Unpaid leave and end-of-service gratuity: What UAE Workers Need to Know?

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Pavitra Shetty

Published on June 11, 2024, 10:28:52

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unpaid leave and end of service gratuity

UAE residents often wonder: Is gratuity paid even with breaks in service? This article addresses this common concern, explaining how unpaid leaves affect your gratuity and how your tenure is calculated in such situations.

Gratuity: A Right with a Requirement

Under UAE law, most foreign employees in the private sector are entitled to gratuity, also known as severance pay. This is a mandatory benefit, regardless of your profession. However, to qualify, you must complete at least one year of continuous service with your employer.

Calculating Your Gratuity: It's All About Continuous Days

The amount of gratuity you receive is based on your last basic salary, excluding allowances. The calculation considers the total number of days you've worked continuously for the company. Here's the key point: unpaid leave periods don't count towards your continuous service.

So, You've Been on Unpaid Leave: What Now?

Let's say you're about to leave your job after five years, but those years haven't been entirely continuous due to unpaid leaves. You wonder, "how will my gratuity be calculated?"

The law is clear: unpaid leaves generally don't contribute to your continuous service. This means only the days you actively worked will be considered when calculating your gratuity.

Important Exception: Continuous Service During Unpaid Leave

There can be some exceptions. If you've been on your employer's work visa throughout your entire employment period, even with unpaid leaves, it might still be considered continuous service in certain situations. However, to be certain, it's highly recommended to seek confirmation from the UAE Ministry of Labour.

Who Might Miss Out on Gratuity?

There are a few scenarios where employees may not be eligible for gratuity, regardless of continuous service:

  • Resigning without giving proper notice (although some companies may offer gratuity at their discretion).
  • Working under an unlimited contract for less than one year.
  • Resigning before the contract ends if you're on a limited contract.
  • Having unauthorised absences exceeding the legal limits.
  • Being terminated for specific reasons outlined in Article 120 of the UAE Labour Law.

Remember:

  • Your gratuity is calculated by multiplying your basic salary by your total continuous service days.
  • Unpaid leaves generally don't contribute to your continuous service.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004Follow The Law Reporters on WhatsApp Channels.

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