Calculating the gratuity of an employee who worked for sister companies?

Hello,

No, we don't want to file a case. I am the employer and want to know the correct manner of settling my employees' rights during their resignation.

We are a group of companies, and often do internal transfers between various sister companies, with proper internal documentation. The accounts of the sister companies are handled separately with separate audit procedures.

We have encountered the following situation:

1) Mr. X was working for 10 years at our construction division at a basic of AED 3000, after which he was transferred to the real estate division at a basic of AED 4000. He has completed 6 years at the real estate division now.

It is to be noted that the finance and audit for both divisions are handled separately.

2) Mr. X has now resigned. Please advise about the basis on which the gratuity portion pertaining to the construction division be calculated as on the date of his resignation.

Awaiting your response at the earliest!

Dear questioner,

Please find below the labor law regarding your inquiry:

Severance Pay; Article 132:

A worker who has completed one or more years of continuous service shall be entitled to severance pay at the end of his employment. The days of absence from work without pay shall not be included in calculating the period of service. The severance pay shall be calculated as follows:

1. 21 days' wage for each of the first five years of service.

2. 30 days’ wage for each additional year of service provided always that the aggregate amount of severance pay should not exceed two years' wage.

Hi,

So the gratuity computation for the first 10 years before transfer to construction division should be taken on the basic of AED 3000 or AED 4000?

The basic salary mentioned on the last labor contract (AED 4000).

Thank You!

Your welcome.

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Sure!