End-of-service benefits are an important financial entitlement for employees whose employment in the UAE comes to an end. However, disputes may arise when an employer fails to pay the employee's gratuity or other outstanding employment entitlements after the employment relationship has ended.
Under UAE Labour Law, qualifying employees may have a legal right to end-of-service benefits, and an employer is required to settle the employee's outstanding entitlements within the period prescribed by law.
If an employer fails to make the required payment, the employee may take legal steps to claim the amounts due.
1. When Is an Employee Entitled to End-of-Service Benefits?
Under Article 51 of Federal Decree-Law No. 33 of 2021 concerning the Regulation of Labour Relations, a full-time foreign worker who has completed at least one year of continuous service is generally entitled to end-of-service benefits upon termination of employment.
For qualifying employees, the gratuity is calculated according to the employee's last basic wage:
• 21 days' wage for each year of service during the first five years; and
• 30 days' wage for each year of service exceeding five years.
An employee who has completed at least one year of continuous service may also be entitled to gratuity for part of a year, calculated proportionately according to the period worked.
The calculation is generally based on the employee's basic wage, rather than the total salary. The law also provides that the total end-of-service benefit for a foreign worker may not exceed two years' wage.
2. When Should the Employer Pay the End-of-Service Benefits?
Article 53 of the UAE Labour Law provides that the employer must pay the worker, within 14 days from the end date of the employment contract, the wages and other entitlements due under the law, its implementing resolutions, the employment contract, or the establishment's regulations.
Therefore, an employee should not have to wait indefinitely for the employer to settle outstanding end-of-service benefits.
If the payment has not been made within the applicable period, the employee may consider taking steps to formally claim the outstanding amount.
3. What If the Employer Refuses to Pay?
If an employer refuses to pay the employee's end-of-service benefits, the employee may raise a labour complaint with the Ministry of Human Resources and Emiratisation (MOHRE).
The complaint may concern unpaid:
• End-of-service gratuity;
• Outstanding salary;
• Unused annual leave entitlement;
• Notice-period compensation, where applicable;
• Other contractual or statutory employment entitlements.
The employee should provide relevant documents and information supporting the claim, including employment records and evidence of the outstanding amounts.
4. What Documents Should an Employee Prepare?
An employee seeking to recover unpaid end-of-service benefits should keep copies of all documents relating to the employment relationship.
Depending on the circumstances, these may include:
• Employment contract;
• Emirates ID and passport copy;
• Work permit or employment records;
• Salary records or payslips;
• Bank statements showing salary payments;
• Resignation or termination letter;
• Employment cancellation documents;
• Correspondence with the employer concerning the outstanding payment;
• Calculation of the claimed end-of-service benefits; and
• Any settlement or acknowledgement signed by the employer.
Keeping clear records can help establish the period of employment, the employee's basic wage, and the amounts that remain unpaid.
5. Can the Employer Deduct Amounts From the End-of-Service Benefits?
An employer may, in certain circumstances, deduct amounts that are legally payable by the employee or ordered by a court, subject to the applicable legal requirements.
The Implementing Regulation identifies certain circumstances in which deductions may be made, including specified loans or advances, certain disciplinary deductions, court-ordered debts, and certain amounts relating to damage caused by the employee.
However, an employer should not simply withhold an employee's end-of-service benefits without a lawful basis.
Where there is a dispute regarding the amount payable, the employee may challenge the calculation or withholding through the applicable labour dispute process.
6. What Happens After Filing a Labour Complaint?
When a dispute arises between an employer and employee concerning employment rights, the matter may be submitted to MOHRE for examination and amicable settlement.
If the dispute cannot be resolved amicably, the matter may be referred to the competent court in accordance with the applicable procedures.
The employee should therefore ensure that the complaint accurately identifies the amounts being claimed and is supported by the available evidence.
Depending on the circumstances and value of the dispute, MOHRE may also have authority to issue a decision in accordance with the applicable provisions of the UAE Labour Law.
7. What If the Employer Claims That Nothing Is Due?
An employer may dispute the employee's calculation or argue that certain amounts have already been paid.
In such circumstances, the employee should review:
• The actual employment start and end dates;
• The last basic salary;
• The employee's continuous service period;
• Any periods of unpaid absence;
• Previous payments made by the employer;
• Any lawful deductions; and
• Any settlement documents signed by the employee.
The correct calculation should be based on the applicable law and the employee's actual employment records.
8. Can an Employee Claim Other Unpaid Employment Benefits?
Yes. A dispute concerning end-of-service benefits may involve other outstanding employment entitlements as well.
Depending on the circumstances, an employee may have claims relating to:
• Unpaid salary;
• Unused annual leave;
• Notice-period compensation;
• End-of-service gratuity; and
• Other amounts arising under the employment contract or UAE Labour Law.
Each claim should be assessed separately because the legal basis and calculation may differ.
9. Is There a Time Limit for Making a Labour Claim?
Employees should not delay taking action where employment entitlements remain unpaid.
Under the UAE Labour Law, claims concerning rights arising under the law are generally subject to a two-year limitation period from the termination of the employment relationship.
This does not mean that an employee should wait before raising a complaint. It is generally advisable to address unpaid employment entitlements as soon as possible while the relevant employment records and evidence remain readily available.
10. What If the Employee Has Already Left the UAE?
Leaving the UAE does not necessarily mean that an employee loses the right to pursue legitimate employment claims.
However, the procedure may depend on the circumstances of the case, the employee's current location, the available documents, and whether the matter needs to proceed beyond the administrative labour complaint stage.
Employees who are outside the UAE should obtain appropriate advice regarding the available procedure before taking further action.
11. Can a Lawyer Assist With an Unpaid End-of-Service Claim?
Yes. Where an employer has failed to pay end-of-service benefits, legal assistance may help the employee understand the amount potentially due and the appropriate procedure for pursuing the claim.
A lawyer may assist with:
• Reviewing the employment contract and records;
• Calculating the potential end-of-service benefits;
• Reviewing unpaid salary and other employment entitlements;
• Preparing the relevant labour complaint;
• Communicating with the employer where appropriate; and
• Assisting with further legal proceedings if the dispute cannot be resolved amicably.
The appropriate procedure will depend on the employee's employment status, the nature of the dispute, and the records available.
Key Takeaway
An employer's failure to pay end-of-service benefits does not necessarily mean that the employee has no remedy.
Under UAE Labour Law, qualifying foreign workers may be entitled to end-of-service gratuity, and employers are generally required to settle the worker's outstanding entitlements within 14 days from the end of the employment contract.
Where payment is not made, the employee may raise the matter through the applicable labour dispute procedures and, where necessary, pursue the claim before the competent court.
Employees should retain their employment contract, salary records, termination documents, and correspondence with the employer, as these may be important when establishing the amount claimed.
Conclusion
Non-payment of end-of-service benefits can create significant financial difficulties for an employee following the termination of employment. UAE Labour Law provides a framework for calculating end-of-service benefits and resolving disputes concerning unpaid employment entitlements.
If your employer has failed to pay your end-of-service benefits or other amounts due after your employment ended, obtaining professional legal advice can help you understand your rights, assess the amount potentially recoverable, and determine the appropriate legal procedure for pursuing the outstanding claim.
