Gratuity Delays in the UAE: What Employees Can Do When End-of-Service Gratuity Benefits Go Unpaid

Non-payment of end-of-service gratuity (EOSG) remains a recurring issue in the UAE, even when formal directives require employers to release outstanding amounts. In some instances, MoHRE may issue a decision confirming an employee’s entitlement, but payment can still be delayed if the legal process is not taken to completion. When complaints are withdrawn based on personal assurances or informal arrangements, statutory rights may remain unsettled and recovery becomes more complicated.

For many workers, gratuity disputes are deeply personal, as end-of-service payments are statutory entitlements that must be enforced through formal channels rather than trust-based arrangements. Legal professionals in Dubai clarify that although the law sets clear requirements for employers, delays and non-compliance can complicate recovery efforts—especially when time limits apply.

What UAE Labour Law Requires for End-of-Service Payments

Under Federal Decree-Law No. 33 of 2021, EOSG is calculated as:

• 21 days of basic salary for each year of service during the first five years; and
• 30 days of basic salary for each year of service thereafter.

Employers must pay full EOSG within 14 days of the employee’s final working day. Delays, including those stemming from internal financial difficulties, do not qualify as legal justification for withholding these mandatory benefits.

In most cases, employees can file EOSG complaints through MOHRE, which often issues decisions without requiring court referral due to the clarity of the law.

MoHRE Decisions vs. Court Judgments

MoHRE decisions support the dispute-resolution process but do not carry the same enforceability as court judgments. Their legal effect depends on how the decision was issued and recorded.

If an employee chooses not to proceed to court following a MoHRE decision, the statutory limitation period under labour law continues to apply. After two years, the option to file a fresh labour case typically expires.

If the employee had instead secured a final court judgment, enforcement would remain valid for up to 15 years, offering long-term protection.

Options That May Still Be Available After a Case Is Withdrawn

Even if the two-year labour claim period has expired, some legal avenues may still apply. These pathways fall under civil procedures rather than labour law and are not affected by the labour statute of limitations:

1. Settlement Agreement
   If communication between employer and employee amounts to a documented settlement, the employee may file a civil claim for breach of that settlement.
2. Acknowledgment of Debt
   Any written confirmation from the employer promising payment may be treated as a debt acknowledgment. This can be used to seek enforcement through an order on petition.

If a Settlement Was Signed or a Court Judgment Exists

The situation differs depending on how the original case was handled:

• Where a final judgment was issued:
  Withdrawal typically involves submitting a settlement agreement to the court. Once registered, this becomes an enforceable instrument. If the employer fails to comply, the employee may ask the court to initiate or resume enforcement without revisiting the original dispute.
  
  
• Where no judgment exists:
• If a written settlement is available, the employee may file a civil case for breach of contract.
• If no settlement was signed, Article 54 of the Labour Law requires claims to be filed within one year from the date the entitlement becomes due. If this period has passed, only amicable negotiations remain available.
  
  

In all scenarios, employees must actively pursue enforcement. Withdrawing a case based on verbal assurances halts the legal process entirely and is a frequent cause of prolonged non-payment.

How to Secure End-of-Service Rights

Employees facing unpaid gratuity should follow a structured legal path:

1. a) File a complaint with MoHRE – MoHRE attempts mediation; unresolved cases progress to Labour Court.
   b) Obtain a Labour Court judgment – This creates a binding order for payment.
   c) Pursue enforcement – Enforcement measures may include freezing bank accounts or seizing assets.
   d) Sign a formal settlement if withdrawing post-judgment – A registered agreement preserves the right to future enforcement if the employer fails to pay.
   
   

Legal specialists emphasise that employees should avoid relying solely on informal assurances and should always secure either a court judgment or a formally registered settlement.

Protecting Yourself From Delayed EOSG

Employers may face financial pressures, but they remain legally obligated to pay gratuity. Employment is a contractual relationship governed by statutory rights, not personal commitments.

While recovery can become more challenging when significant time has passed or when a complaint has been withdrawn, options may still remain available if there is evidence of:

• a documented settlement,
• a written acknowledgment of debt, or
• an enforceable court judgment or registered agreement.

Employees encountering similar issues should maintain thorough records, secure written confirmations, and pursue formal enforcement procedures to protect their entitlements.

 

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