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MoHRE Helps Settle End- of-Service Benefits Disputes Through Mediation or Court

For departing UAE expats, understanding end-of-service benefits is vital for a smooth financial transition

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Rakeshh Kumar SV

Published on June 5, 2024, 10:10:23

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end of service benefits disputes uae

For expatriates leaving the United Arab Emirates, understanding how to collect end-of-service benefits is crucial. These benefits, a mandatory part of employment contracts, are designed to provide financial security to employees after their tenure in the country. Here’s a comprehensive guide on how to navigate the process effectively.

Understanding End-of-Service Benefits

End-of-service benefits, commonly known as gratuity, are stipulated by the UAE Labour Law. The amount an employee receives depends on their length of service and the nature of their termination. Typically, an employee who has completed at least one year of continuous service is eligible for these benefits.

Steps to Collect End-of-Service Benefits

Resignation or Termination: The process begins with either resignation or termination. Employees should provide proper notice as stipulated in their contract to avoid any legal complications.
Final Settlement: Upon resignation or termination, the employer is required to prepare a final settlement which includes the end-of-service benefits. This settlement should be provided within 14 days of the employee’s last working day.
Calculating Gratuity: The gratuity is calculated based on the employee's last drawn basic salary, excluding allowances and bonuses. The formula typically used is:

  • 21 days of basic salary for each of the first five years of service.
  •  30 days of basic salary for each additional year after five years.

Documentation: Employees must ensure all documentation is in order. This includes a copy of the labour contract, proof of salary and records of service duration. It is advisable to keep copies of resignation letters or termination notices.
Clearing Dues: Before leaving the UAE, employees should ensure all financial dues are cleared, including any outstanding loans or credit card bills. Employers might withhold the end-of-service benefits if there are any unresolved dues.
Exit Formalities: Completing exit formalities is crucial. This includes cancelling the work visa, returning company property, and obtaining a clearance certificate from the employer.
Legal Recourse: If there is a dispute over the end-of-service benefits, employees can approach the Ministry of Human Resources and Emiratisation (MoHRE) for resolution. The MoHRE provides mediation services and can facilitate legal action if necessary.

Key Considerations

Partial Benefits: Employees who resign before completing five years of service might receive partial benefits, calculated on a pro-rata basis.
Unlimited vs. Limited Contracts: The type of employment contract affects gratuity calculation. Limited contracts usually provide better terms if terminated before completion.
Gratuity Caps: The gratuity amount is capped at two years’ worth of salary, regardless of the length of service.

Expert Advice

Legal experts advise expatriates to familiarise themselves with the UAE Labour Law and consult with legal professionals if needed. “Understanding your rights and the legal framework can help ensure a smooth transition,” says Mary Rintu Raju NYK Law Firm, a legal consultant based in Dubai.

Conclusion

Collecting end-of-service benefits requires careful planning and adherence to legal procedures. By following the outlined steps and seeking appropriate advice, expatriates can secure their rightful dues and make a smooth transition as they leave the Emirates.

For more detailed information, expatriates are encouraged to visit the MoHRE website or consult with legal professionals specialising in UAE labour law.

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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