Questions & Answers
How to calculate gratuity after reducing the salary?
My question is how to calculate the End Of Service Benefits for an employee working in a private company with an unlimited contract?
My basic salary was (on average) AED 9000 per month from the year 2009 to 2019, which is reduced to AED 5000 in a new contract signed in 2020.
Unfortunately, the company has terminated me in 2021. Now, based on which basic salary my EOSB will be calculated; the first 10 years based on AED 9000 or last year (2020) based on AED 5000?
Dear questioner,
Trust you are well.
Based on the facts stated above, I am inclined to consider that your end of service benefits, at least for the year 2009-2019, must be calculated on the basic salary of AED 9000.
I must review the paperwork related to your employment to be able to understand if the reduction made with regards to your salary as being a temporary or a permanent one and if there are other terms that must be considered when calculating the end of service.
Should you require assistance, please feel free to message me via email.
