Questions & Answers
Calculation of the EOSB upon termination of employment contract
Hi Rajasree
I have worked for a company for 2 years. We have two companies with different names one in Dubai & the other one is in Sharjah.
My first visa was in Dubai; after that, there was some financial problem in the Dubai company so they changed my second visa to the Sharjah company.
They have given me a gratuity of 21 days of the month, but now they are telling me it is a wrong calculation (1/3 of 21 days). But this case is applicable only if I resigned from the job.
I am not resigning, which means the company terminated me and changed to the Sharjah company.
Kindly provide some suggestion.
Dear Questioner,
I am not sure whether you have signed a limited or unlimited contract. Hence, I am explaining both situations below.
In an unlimited contract, both parties (employer and employee) are free to terminate the contract in a mutual agreement with a minimum of 30 days’ notice period.
The employer may keep more than 30 days up to a maximum of 3 months as the notice period. If the employee is not serving the notice period, he has to compensate the employer for that period (Art.120 and 121 shall be taken care).
Where an employee resigns from an unlimited term contract, he will be entitled to an end of service gratuity on the following sliding scale:
- Period of service of between one to three years: 2/3 reduction;
- Period of service of between three to five years: 1/3 reduction
If the period of service if over five years there is no reduction.
If the employer is terminating the employee, he shall have a valid reason either under Art.120 or any other reason of poor performance as specified in the employment contract.
If there is no valid reason, the termination would be considered as arbitrary and the employer will be liable to pay 3 month’s salary as compensation.
Where the employee terminates a limited contract on his absolute discretion before expiry or before 5 years of continuous service, the employee is not entitled to any benefits.
If you need any further clarification on the above, you may write to me or call me at 0544461746.
