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Gratuity calculation

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After the completion of at least one year or more than a year, the employee at the end of the employment is given the compensation services. The sum of perquisites includes only the on-duty days of work in UAE and Abu Dhabi.

The perquisites sum is as follows:

  1. Every year of the first half-decade include the wages of twenty-one days.
  2. Thirty days pay is then included for every extra year.
  3. Although, the total compensation shall not be more than two decades wages.



On the completion of the first annual of employment, the employee shall be given the compensation for the save part of the year.



Without any favor to the terms of several laws, workers will receive the services compensation on the average of the daily basis for the employers on daily wages. Although, workers who are on the weekly or monthly wages get their compensation based on their last pay as mentioned in Article 57.



The amount that is due to the employer by the company or organization is deducted from the employer at the termination of the job.





Compensation for Occupational Injuries

The occupational injuries and diseases are defined by the Schedule 1 or Schedule 2. Providing proper treatment to the employee and communicate with the people there and accurately mention the incident in documented form is the employer’s responsibility.

As set forth in ARTICLE 145, if the working employee is ill and unable to work then the employer must pay his allowances. If in any case, the employee is permanently disabled due to serious injury or disease. Allowances will be allotted to the employee based on the percentages set forth in Schedule 2 and putting the level of disability.

If the injury or illness of the employee results in a death, his kin will be given the allowances for two years. The amount of compensation will be equivalent to the last basic pay of the employee before his death, mentioned that the allowance or compensation amount shall be at least eighteen thousand Dirhams and shall not be more than thirty-five thousand Dirhams.

The employee will not be provided with an allowance if it is proved that the employee has injured himself due to defying the safety measures at the workplace.


Labour Disputes

In case of any issue or dispute that arises between the employer and the employee or the group of the employee than the employee or the worker should log a complaint transcribed to employer or labor department. Within seven days of the complaint, the employer should contact the employee and the labor department to resolve the issue. If the employer is unsuccessful in doing so, then the labor department will investigate the issue.


Labour Inquiry

Knowledgeable and expert inspectors associated with the Labour Ministry and Social Affairs usually resolve Labour Inquiries. They strengthen that working place complaint and issues according to laws mentioned in Federal Law No.8, 1980. The inspector has the authority of modifying the facilities if they are harmful or insufficient.



Penalties that are mentioned in ARTICLE 181 include custody for half a year and a penalty between 3000 – 10,000 Dirhams, in case of violation of laws and rules to be followed.

Repeated violation of the law may also result in double penalties. In the current amended law, if any of the below-mentioned criteria is fulfilled than a new work permit should be allotted to the employee and no ban will be enforced. The worker or the employee is exempted from six months requirements if the following skill levels are reached in case of both limited and unlimited organization:

Level 1: Graduated Employees

Level 2: Diploma Holders

Level 3: Intermediate


Limited Contracts and Labor Ban:

Labor law is designed to protect both the employees and employers. Workers under limited agreements are more open to the labor bans than those under unlimited agreements.

Under the following circumstances, no ban shall occur:

  1. If the outdated agreements are not renewed.
  2. Both the parties mutually finish the agreement before completion of fixed time as long as the workers have finished at least six months of labor.
  3. The termination of an employee without any reason after his six months of working period.
  4. Revived the contract after it has been terminated, such as:
  • The proper legal notice is given to the terminating party.
  • The terminating party first fulfilled the requirements with regard to the early termination compensation.


Following Circumstances May Not Give Rise to Ban:

  1. The contract can be terminated by the mutual agreement of the two parties even if the service of the employee is less than six months.
  2. If the employee did his services for almost six months and he gets his notification properly by rules.
  3. If the employee did his job for six months and is struck off from the job for no reason.

Labor ban main points:

No labor ban shall occur in the following situations.

  1. When the owner is unable to follow the terms of the contract i.e. if he is unable to pay the extra 60 days salary to his employee.
  2. When the business is not stable and in that situation, the workers are unable to do their jobs properly.
  3. If labor court ordered that employer is charged with unpaid wages of two months, he is bounded to grant payment to avoid unexpected removal of the contract.


Termination of Limited Contracts

  1. The time frame of the contract is decreased to two years.
  2. The contract may be expired by joint agreement between the parties.
  3. The contract may be canceled by any party.

Although, the following criteria must be followed to avoid legal upshots:

  1. The termination notice must be given in a written form.
  2. The term of notice is one month and may not be more than three months.
  3. During the period of notice the expelled party must continue his duties till the expiry date of the contract.

Termination of Unlimited Contracts

  1. A contract could be expired by both parties through joint consent.
  2. If all the obligations did which were mentioned in the contract during the notice time, then any party could end the contract.
  3. Legal issues could be charged if the terminating party fails to fulfill the terms of the contract. Anyhow both parties have the right to get back their payments under the Labor law UAE.


Contract termination by an employee may arise due to the following reasons:

  1. When the employee is unable to provide incentives or benefits to the employee.
  2. When an employee is terminated before the time period mentioned in the contract and a case is filed against the employer in the Ministry of Labour.
  3. The downsizing or closing of business and the employer is unable to carry out the employment of the worker or employer.

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