No gratuity for workers with less than 1-year service

ABU DHABI — An employee who is terminated before completing one year of continuous service shall not be entitled to severance pay, an official at the Ministry of Labour and Social Affairs told Khaleej Times.

By Nada S. Mussallam

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Published: Sat 25 Sep 2004, 9:32 AM

Last updated: Thu 2 Apr 2015, 2:47 PM

The official statement came following a recent dispute in which Egyptian employees, whose services were terminated before completing the probation period, lodged a complaint with the ministry demanding end-of-service benefits. The employees, who were working for a contracting company in the capital, had worked for only four months before being terminated, said the official.

“The workers also protested over unpaid salary for one month. They insisted on getting end-of-service gratuity, and seemed unwilling to settle the case peacefully” said the official.

He said as per Article 132 of the labour law, a worker who has not completed one year of continuous service, shall not be entitled to severance pay on termination of his employment.

He noted that the severance pay shall be calculated as follows: 21 days remuneration for each year of the first five years of service, 30 days remuneration for each additional year of service, provided that the aggregate amount of severance pay shall not exceed two years’ remuneration.

“Abiding by the law, the ministry decided that the workers, were not entitled to end-of-service benefits and summoned the employer to reach a settlement concerning their claims that they have pending dues.”

After prolonged discussions between the two parties, under the supervision of the Labour Reconciliation Committee at the ministry, the workers realised that they will lose the case to the employer and opted for an amicable solution, said the official. He said the ministry decided that the employer shoulder the expense of ‘back-home’ tickets for the workers and pay them their dues without delay.

The official underlined that if an amicable settlement was not reached, the ministry would have referred the case to the court, in line with Article 6 of the labour law, stipulating that if an amicable settlement was not reached, the Labour Dispute Department must within two weeks, from the date of filing the complaint, refer the case to the labour court for quick settlement.

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