Can UAE Employers Withhold End-of-Service Benefits During Notice Period? What the Law Says About Worker Rights

Questions surrounding end-of-service benefits often arise when disputes emerge between employers and workers during the notice period. In many workplaces across the UAE, employees fear that complaints, disciplinary action, or sudden investigations before their final working day could lead to the loss of gratuity and other dues. However, the UAE Labour Law provides specific protections to workers and clearly outlines the circumstances under which disciplinary action may be taken.

Under the UAE Labour Law, an employer cannot arbitrarily deprive an employee of end-of-service benefits merely because an investigation is initiated during the notice period. Even if an employer alleges that the worker violated workplace instructions or company policies, the law distinguishes between disciplinary penalties and the employee’s statutory right to gratuity.

The law permits employers to impose disciplinary sanctions on employees who violate workplace rules, the provisions of the Labour Law, or regulations issued for its implementation. These penalties may include warnings, deductions, suspension, or even termination of service. However, the law specifically provides that termination can occur while still preserving the worker’s right to end-of-service benefits.

Article 39 of the UAE Labour Law states that an employer or their representative may impose disciplinary penalties on a worker who violates the provisions of the law or implementing regulations. Among the penalties listed is termination of service while maintaining the worker’s entitlement to end-of-service benefits. This means that even if an employer decides to dismiss an employee as a disciplinary measure, the gratuity itself cannot automatically be withheld.

The issue becomes more sensitive when an employer attempts to terminate an employee without notice during the notice period itself. UAE Labour Law allows dismissal without notice only in specific circumstances and subject to strict procedural requirements.

Article 44 of the Labour Law permits an employer to dismiss a worker without notice after conducting a written investigation, provided that the dismissal decision is issued in writing and supported with reasons. The employer or their representative must also formally hand over the decision to the worker.

One of the grounds mentioned under Article 44 relates to violations of workplace safety instructions or internal regulations. However, the law requires that such instructions must be clearly written, displayed prominently at the workplace, and communicated to the employee beforehand. The employer must also establish that the worker was aware of those rules.

Importantly, even where dismissal without notice is legally justified, the law does not automatically extinguish the employee’s right to end-of-service benefits. The employer may avoid paying notice compensation in certain legally recognised cases, but gratuity and other accrued entitlements remain protected unless specific legal grounds exist to deny them.

The UAE’s labour framework therefore separates disciplinary liability from statutory financial rights. Employers retain the authority to investigate misconduct and take disciplinary action where justified, but workers continue to enjoy legal protection over their earned end-of-service dues.

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