أسئلة وأجوبة
Which labor law applies to a resigned employee who still was on an unlimited contract?
If an employee has resigned within 3 years and his contract has not been converted to a limited contract, what would be the gratuity to be paid?
The date of Joining is 1/1/21, and the last day of service is 31/12/23. The basic salary is 10,000.
Will it be as per the New Labour Law or can we pay them as per the Old Law as mentioned in Article 68 of the new law which reads as below:
"Subject to the provision of Clause (2) of this Article, the employer may calculate the end of service benefits in accordance with the provisions of the employment contract with an undefined term stated in Federal Law No. (8) of 1980 indicated above."
Dear Client,
Thanks for your question, I hope you are doing well. I will definitely assist you in this matter.
Under the New UAE Labor Law effective from February 2, 2022, for employees with unlimited contracts who resign within 3 years, the gratuity calculation has changed. If an employee has served for less than one year, no gratuity is payable.
If they've served one year or more but less than 3 years, they are entitled to one-third (1/3) of their basic salary for each year of service.
For example, if an employee with a basic salary of AED 10,000 resigns after 3 years, they would receive a gratuity of AED 10,000.
This calculation aligns with the new law, but contractual terms may apply if specified otherwise. For precise advice, consult the UAE Ministry of Human Resources and Emiratisation (MOHRE).
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Thanks & Regards
ABDUL WAHIED
