Can Gratuity Be Denied in the UAE? Article 120 & Misconduct Rules

Gratuity is a legal right in the UAE, but it is not unconditional. This page explains the specific, limited circumstances under which an employer can lawfully deny or reduce it, and what to do if you believe gratuity has been withheld unfairly.

The General Rule: Gratuity Is a Legal Entitlement

Once you’ve completed at least one year of continuous service, gratuity is not discretionary — your employer cannot simply decide not to pay it. Denial or reduction is only lawful in a small number of specific, defined situations.

When Gratuity Can Be Denied Entirely

• Less than one year of service. This is an absolute cutoff regardless of the reason for leaving.
• Dismissal for serious misconduct as defined under the UAE Labour Law — commonly cited examples include fraud, dishonesty, serious safety violations, physical assault of a colleague, or causing significant deliberate financial harm to the employer.
• Abandonment of employment — leaving without notice and without returning within a short defined period, typically cited as around seven days.

What Counts as “Serious Misconduct”?

The bar for misconduct serious enough to forfeit gratuity is intentionally high — it is not the same as ordinary performance issues, disagreements with management, or minor policy violations. Employers who attempt to deny gratuity for general performance reasons, personality conflicts, or minor infractions are on weak legal ground, and employees in this position have the right to dispute the decision through MOHRE.

What Does NOT Justify Denying Gratuity

• Simple resignation, even without stated cause, does not result in automatic forfeiture under current law (though it may reduce the amount on a legacy unlimited contract — see our guide on limited vs unlimited contracts).
• Poor performance reviews alone are not grounds for denying gratuity.
• Disputes over notice period length may affect other parts of your settlement, but do not automatically forfeit gratuity entirely.
• Verbal accusations without formal process — misconduct serious enough to forfeit gratuity typically needs to be properly documented and justifiable.

Partial Deductions vs. Full Denial

It’s worth distinguishing between your employer denying gratuity entirely (only lawful in the specific cases above) and deducting legitimate amounts you owe from your final settlement, such as outstanding loans or advances — see our guide on what employers can and can’t deduct from gratuity for that distinction.

What to Do If You Believe Your Gratuity Was Wrongly Denied

1. Request a written explanation from your employer for the denial, citing the specific reason.
2. Review your employment contract and any documented disciplinary process related to the stated reason.
3. Calculate what you believe you’re owed using the UAE Gratuity Calculator for reference.
4. If you believe the denial is not justified, file a complaint through MOHRE’s smart services — MOHRE typically contacts the employer for clarification shortly after a complaint is filed.
5. For larger disputes, consider consulting a UAE labour lawyer.

Frequently Asked Questions