Denying end-of-service pay by demanding unpaid rent after years of free accommodation

Hello,

UAE labor law mandates that employers provide end-of-service benefits to employees upon completion of their service.

These benefits are calculated based on your salary and length of service and cannot be arbitrarily withheld.

While providing accommodation can be considered a benefit, it does not negate your right to end-of-service benefits.

The value of the accommodation, if any, should be considered separately and not used to offset your rightful entitlements.

The absence of an Ejari contract and consistent rent payments for eight years weakens your employer's claim for rent.

Attempt to negotiate a settlement with your employer, emphasizing your legal rights and the potential consequences of withholding your end-of-service benefits.

If negotiations fail, you can file a complaint with the Ministry of Human Resources and Emiratization (MOHRE).

If you need further assistance to handle this issue, kindly share your WhatsApp number.

Dear Questioner,

Thanks for your inquiry!

Regarding the above, we would like to inform you that, under UAE labor law, an employer cannot legally withhold the end-of-service (EoS) benefits by citing accommodation issues or unpaid rent. Let me explain the legal framework and your options:

1. End of Service Benefits:

According to Federal Decree-Law No. (33) of 2021 On the Regulation of Labor Relations (UAE Labour Law), an employee is entitled to end of service benefits (EoSB) upon the termination of employment, which includes payment for unused annual leave, gratuity, and other entitlements, regardless of any accommodation arrangements.

The EoS benefits are separate from any personal accommodation arrangements made by the employer, and the law does not allow an employer to offset the EoSB against accommodation rent or any other liabilities unless explicitly agreed upon in writing and part of the contract.

2. Accommodation Provided by the Employer:

If the employer has been providing accommodation for you for 9 years, it does not affect your EoS benefits. It is common for companies to offer housing, but the accommodation provided is generally considered a benefit and not a deduction from the EoS entitlement.

If there was no formal rental agreement (Ejari), but the employer allowed you to stay in the property without making rent payments for years, it could be argued that the accommodation was a part of your employment agreement, and no outstanding rent should be charged now, especially after 8 years of non-payment.

3. Employer’s Claim of Rent Due:

Your employer cannot legally demand rent for the past 8 years of accommodation without prior agreements or without providing you formal notice that rent would be due.

If your employer is attempting to deduct the EoSB based on the argument that you owe rent for accommodation, this would likely be invalid under UAE labor law unless you had agreed to this in writing as part of your contract.

4. What You Can Do:

- Review Your Contract:

Check if there is any clause about accommodation and whether rent deductions are mentioned. If no such clause exists, the employer cannot legally use accommodation as a basis for withholding EoSB.

- End of Service Gratuity Claim:

You are entitled to your EoS benefits, and the employer cannot legally withhold them based on accommodation disputes. If you retire or resign, you should demand the full payment of your EoS benefits as per your 25 years of service.

- Document Your Communications:

Keep all communication regarding the accommodation, including any emails or written agreements with the employer, especially if they claim that rent was due in the past.

- Mediation or Legal Action:

If the employer insists on not paying your EoS benefits, you can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) or proceed with legal action. The MOHRE can mediate the issue, and if the employer is found to be violating the law, they may be required to pay the EoS benefits in full.

5. Next Steps:

If the employer refuses to pay your EoS benefits, consider approaching MOHRE or seeking legal assistance to claim your dues. It’s important to act promptly to prevent any delays in receiving the full benefits.

In conclusion, the employer cannot withhold or reduce your end-of-service benefits by citing the accommodation provided or any unpaid rent for the past years.

Let me know if you need any further assistance on this issue.

Best regards,

Mohammed Salah

Legal Consultant

Hello,

In some employment contracts, it may be stipulated that accommodation will be provided by the employer, but this does not necessarily offset the employee’s entitlement to EoSB.

The fact that your employer provided you with accommodation (without an Ejari) does not negate your right to end-of-service benefits.

If anything, the employer’s provision of accommodation is an employment benefit, not a deduction from your EoSB.

The accommodation arrangement between you and the employer is a separate matter from your end-of-service benefits.

As long as you were not paying rent, and the accommodation was part of your employment terms, your employer cannot reduce or deny your EoSB based on this.

For further assistance, kindly share your WhatsApp number.

No, the employer cannot deny the EoSB on the grounds that they provided accommodation facilities.

You can file a complaint with MOHRE regarding this.

Dear Client,

Thanks for your question! I hope you are doing well. I will assist you in this matter.

In the UAE, an employer cannot legally withhold end-of-service gratuity by citing accommodation arrangements, especially after 25 years of service.

The labor law mandates that end-of-service benefits are a legal right based on continuous employment, calculated at 30 days' basic salary per year.

The employer's attempt to retroactively charge rent for 8 years to offset gratuity payments is not permissible under UAE labor regulations.

You should document all communication, gather evidence of your long-term service and accommodation agreement, and file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).

Seeking legal advice from a labor law expert would help protect your rights and ensure you receive the full end-of-service gratuity you are entitled to after your dedicated years of service.

Thanks & Regards,

ABDUL WAHIED

According to UAE law, the employer cannot withhold end-of-service benefits citing accommodation provided.

If accommodation was provided without a formal lease agreement or written contract, it cannot be used to offset your end-of-service dues. You are entitled to claim your full end-of-service benefits after 25 years of service.

1. End of Service Benefits: Employers in the UAE must pay end-of-service benefits after termination, regardless of accommodation provided.

2. Accommodation and Rent Claims: Retroactive rent charges for provided accommodation without a formal tenancy agreement (ejari) may not be valid, especially if the employer did not previously request rent.

3. Legal Standing: The sudden rent demand could be an attempt to withhold end-of-service benefits and needs to align with employment contracts and labor laws.

4. Document Everything: Organize all relevant documents, including your employment contract and any communication about your accommodation and rent.

5. Seek Legal Advice: Consult a labor lawyer specializing in employment law to understand your rights and options.

6. Contact the Ministry of Human Resources: If in the UAE, reach out to the Ministry of Human Resources and Emiratisation (MoHRE) for assistance.

7. Negotiation: Try to negotiate with your employer to resolve the issue amicably, stressing your long service.

Conclusion:

The employer's request for retroactive rent is legally questionable. Taking action, seeking legal advice, and involving labor authorities will help protect your rights and ensure you receive your entitled benefits.