The legal basis of calculating the end of service gratuity

Hi,

With regards to the end of service gratuity, the UAE Labor Law (UAE Federal Law No. 8 Concerning Regulation of Labor Relations) Article 134, states:

“The end of service gratuity shall be computed on the basis of the last wage which the employee was entitled to, in respect of those drawing their salary per month, week or day, and on the basis of average daily wage stipulated in Article (57) in respect of those drawing their wages on piece of work basis. The wage which is considered as the basis for computation of the end of service gratuity shall not include anything that has been given to the labourer in kind, housing allowance, transport allowance, travel allowance, overtime allowance, representation allowance, cashier's allowance, children education allowance, recreation and social services allowance or any other allowances.”

Therefore, we may conclude that the end of service gratuity likely only includes “basic salary,” given the exclusions stated in Article 134 of the UAE Labour Law.

Please feel free to reach us via email at a.odeh@miolawfirm.com if you have any further concerns.

Regards,

Ahmed Odeh