Gratuity calculated on basic salary last drawn

Gratuity calculated on basic salary last drawn

By Ashish Mehta (Legal View)

Published: Mon 4 Mar 2013, 9:35 AM

Last updated: Tue 7 Apr 2015, 5:07 PM

My residency visa expired on January 11, but has been cancelled because the company does not have funds to clear my dues. I have completed eight years at the same company. The firm is calculating gratuity as per my old contract drafted five years ago. I am getting more than double that amount now. The company has asked me to sign a letter to cancel the visa but I didn’t sign it because I fear I will not get my dues.

Your employer is obliged to pay you a gratuity based on your basic salary. Law No.8 of 1980 regulating labour relations states: “Without prejudice to what is provided for by some laws on some establishments, severance pay shall be calculated on the basis of the remuneration last due to the worker for those who are of the daily remuneration referred to in article 57 of this law for those who are paid at piece rates basis. The severance pay shall not include what is given to the worker in kind, and housing allowance and transport and travelling allowances, overtime pay, representation allowances, cashier’s allowances, children’s education allowances, allowances for recreational and social facilities and any other allowances or increments.”

You have completed eight years of employment with the same employer, therefore your gratuity should be calculated on 21 days of basic salary for the first five years and thereafter on 30 days of basic salary last drawn.

Further, you are entitled to receive your full outstanding dues from your employer not later than the time your employer seeks your signature on the visa cancellation document.

You may file a complaint with the Ministry of Labour in the event your employer does not comply with the provisions.

Medical leave

I have been working on an unlimited contract at a hospital in Abu Dhabi for almost two years now. Recently I had an medical emergency for which I had to be away from duty for about two hours. I informed my absence to the management upon resumption of my duties same day, but I was surprised to receive my salary with deduction of half a day’s salary for the same without prior communication. I have enough leave available but did not think of applying as it was just a matter of being away for an hour or so. I would like to know if it’s legal to deduct anybody’s salary without prior communication. Also, I would like to know to which authorities I should complain. The place where I work is a government body with no labour cards or contracts.

It is assumed that you are employed by the Federal Government of the UAE; hence Federal Law Decree No. 11 of 2008 regarding Human Resources in Federal Government shall be applicable. Article 51 (1) of the aforesaid law states: “A sick leave will be permitted under an approved medical report from an official medical authority for a period of no more than five working days at a stretch every time and with a maximum 15 working days in a year and in case the period of sickness exceeds, then the permission of such leave shall be under a medical report issued by the medical committee.”

It appears that your medical emergency is not supported by an approved medical report issued by the official medical authority. Therefore you are unable to seek any relief in accordance with the aforesaid article.

Further, Article 83 © of Federal Law Decree No. 11 of 2008 regarding Human Resources in Federal Government states: “The penalties of violations which may be imposed upon the employee shall as per the following:

Deduction from basic salary of no more than pay for 10 days for each violation and no more than 60 days per annum.”

Should you not be satisfied with the decision of your employer you may approach the complaints committee of the ministry you work with as per Article 97 of Federal Law Decree No. 11 of 2008 regarding Human Resources in Federal Government which states: “The employee may apply to the Complaints Committee a written complaint against administrative penalties imposed by the violations committee against him, the decisions of the Committee shall be final in connection with complaints filed to regarding penalties of written notice and drawing of attention.”

Notice period

I have been working with a company in Dubai since September 2012. My contract is unlimited and I have a labour card. However, I am not on the company’s visa. I am a post-graduate but my salary is below Dh5,000. Currently, I am on probation which will end on March 23. Please let me know if I can resign, and what would be my notice period?

You may resign from your employment by serving 30 days notice to your employer in accordance with Article 117(1) of the Federal Law No. 8 of 1980 regulating Labour Relations which states: “Both the employer and the worker may terminate a contract of employment of unlimited duration for a valid reason at any time following its conclusion by giving the other party notice in writing at least 30 days before the termination.”

In the event your employment offer letter stipulates that during probation period the employee may resign without serving any notice period, then the above requirement of serving 30 days notice period may not be applicable.

Ashish Mehta, LLB, F.I.C.A., M.C.I.T., M.C.I.Arb., is the founder and Managing Partner of Ashish Mehta & Associates, a legal consultancy firm in Dubai. He also practises in India, United Kingdom and Singapore. He has worked with international and commercial legal procedures, providing analysis and counselling on complex legal documents and policies such as commercial transactions, securitisation, real estate acquisitions, financial restructuring for distressed assets, mergers and acquisitions, arbitration and litigation issues. Readers may e-mail their questions to: or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

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