Employer Denying Gratuity in UAE: Complete Guide for Employees

End-of-service gratuity is a statutory right of employees in the UAE, but many workers face a situation where their employer refuses to release them. It is important to understand your rights, eligibility, and legal recourse so that you can claim your rights. This guide provides a detailed overview based on Articles 44, 88, 120, 138, 139b of the UAE Labour Law, and also provides insights from recent Supreme Court interpretations.

End-of-service benefits (EOSB) or gratuity is a monetary entitlement that private sector employees receive upon termination of their job. The calculation depends on the type of contract, length of service, and reason for leaving.

Eligibility Criteria:

• Minimum 12 months of continuous service.
• Compliance with notice period of employment contract.
• Proper conduct under UAE Labour Law.

Gratuity Calculation:

• 1–5 years service: 21 days of basic salary per year.
• More than 5 years: 30 days of basic salary per year (after 5 years).
• Maximum payout: Up to two years’ total salary.

Gratuity is legally mandated, but in some specific situations, the employer can withhold it:

1. Incomplete Service Period – If the employee has not completed 12 months of continuous service, he is not eligible.
2. Early Resignation on Unlimited Contracts – If you resign without notice, gratuity can be forfeited (Article 139b).
3. Violation of Employment Conditions – Providing false documents, misrepresenting your identity or nationality (Article 44).
4. Gross Misconduct or Moral Issues – Such as fraud, theft, harassment, breach of ethics, or leaking company secrets (Articles 40, 120).
5. Working for Another Employer While on Leave – If you work for someone else while on leave, termination may occur without gratuity (Article 88).
6. Illegal Activities During Employment – If an employee commits a criminal act or regulatory violation, the employer may terminate the gratuity through a disciplinary process.

1. Verify Your Eligibility – First check whether your service is more than 12 months and what is the contract type.
2. Request Payment Formally – Give a written request to the employer for gratuity and pending benefits.
3. Contact MOHRE – You can seek mediation by complaining to the Ministry of Human Resources and Emiratisation (MOHRE).
4. Legal Action – If the matter is not resolved, file a case in the UAE Labor Court.
5. Enforce Court Orders – The court can also recover gratuity by seizing the assets of the employer (Article 4, UAE Employment Law).

Step 1: Determine your basic salary.
Step 2: Multiply days of gratuity per year (21 for 1–5 years, 30 for 5+ years).
Step 3: Multiply by total years worked.
Step 4: Ensure total payout does not exceed two years’ salary.

Tip: Use online gratuity calculators for complex cases, including part-time work or multiple contracts.

• Maintain employment contracts, payslips, and correspondence.
• Document any disciplinary actions, warnings, or incidents.
• File complaints promptly with MOHRE or Labor Court.
• Understand your entitlements under Articles 44, 88, 120, 138, 139b of the UAE Labour Law.

End-of-service gratuity is a legal right, not a benefit at the employer’s will. An employer cannot stop it at will. If you understand your legal rights, eligibility and the steps to make a claim, you can protect your financial interests even after your job ends.

If you need expert guidance on UAE labour law or gratuity disputes, consult a UAE labour law expert.