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Gratuity only after five years

Q: In your column I had read sometime back that under the Dubai labour law, any employee with valid work permit and employment contract is eligible for gratuity after the completion one year of continuous service, even if the employee resigns on his free will.

Our company signs a legal limited contract with every employee. The contract does not specify any end service benefits. All it says is “any term of service specifically provided herein, will be dealt with in accordance with Labour Law No.8 of 1980”.

I have completed four years and three months of continuous service. I had renewed the contract at the end of the third year for a further period of three years. I have submitted my resignation since I am going back to India.

The company claims, as per the labour law, I am not eligible for any gratuity or other end service benefits unless I complete five years of continuous service. As per our company policy, I was told, gratuity is payable only under two conditions: either at the end of three years of service if we don’t renew the contract or after five years of continuous service.

Please let me know the legality of the rule which, our company is following.

A: The three years of the first employment contract, which is renewed for further three years, are added to the total stint of your service.

This means you have worked for a total period of four years and three months as per Article 38, second paragraph of the Labour Law, which reads like this: In case of renewing the contract, the new period or periods shall be considered a continuation of the original period. It or they shall also be added thereto when calculating the total period of the employee’s (service).

Whereas you submitted your resignation on your free will, you shall be deprived of the end-of-service gratuity, according to Article 138 of the very law, which reads: “If an employee, who works under a contract of specified term, resigns on his free will before the end of the contract, he shall not be entitled to end of service benefits unless his continuous service exceeds five years.”

An employee, under Article 139 of the very law, shall be deprived of his gratuity in any of the following two cases:

1. If he is dismissed for any of the reasons stated in Article 120 of this law or if he quits work to avoid dismissal according to its rules.

2. If he voluntarily quits his job without notice in cases other than the two provided for in Article 121 of this law. This applies to contracts with unspecified period or cases where the employee has not completed five years of continuous service as regards contracts of specified term.

The reasons stated in Article 120 are: If the employee commits one of the following:

• assumes a fictitious personality or nationality or submits fake documents or certificates,
• is terminated during probation period,
• commits a mistake causing grave financial loss to his employer,
• violates the written safety instructions,
• fails to carry out his basic duties,
• discloses a secret of the establishment he works for,
• is exclusively convicted by court of an offence involving honour, honesty or public morals,

• is intoxicated or under the influence of drugs during working hours,

• commits a physical assault on the employer or the manager in charge or one of his colleagues during working hours,
• absents himself without a legitimate reason for more than 20 interrupted days or more than seven continuous days during a single year.

The two cases provided for in Article 121 of this law are:

• If the employer fails to fulfil his obligations towards the employee as provided in the contract or in the law,
• If the employer or his legal representative assaults the employee.

— Compiled by Ahmed Shaaban

• UAE