What is Gratuity Pay?
- Gratuity pay is a reward offered to an employee for his loyalty to the company. If an employee resigns, retires, or has mutually agreed on the termination of the contract of employment for other reasons, he is entitled to a gratuity pay.
- The gratuity pay for an unlimited contract is governed by the Article 137 of Federal Law No. 8 of 1980, which explains that if an employee has worked for more than one year but less than three years, he is entitled to one-third of the salary (without other benefits) as gratuity pay. However, if he has worked with the company for more than three years but less than five years, he is then entitled to two-third of the salary (without other benefits) as gratuity pay.
Eligible for a Gratuity Pay?
There are many instances where the employee for unknown reasons and unawareness fails to claim their gratuity and other labor claims on and after resignation, retirement, or on other such circumstances. Failure to bring a claim for gratuity within one year is governed by Article 6 of the Federal Law No. 8 of 1980.
FROM THE LAW
Article 6 of the Federal Law No. 8 of 1980, states
“In all cases, no claim of any entitlement due under the provisions of this law shall be heard if brought to the court after the lapse of one year from the date on which such entitlement became due, and no claim shall be admitted if the procedure stated in this article are not adhered to.”
In all situations, this law will be upheld, and there is less probability for labor claims to be considered in the Courts if there has been a time-lapse.
Also Read: Can You End Your Limited Contract Early?
Crossed a Year to Bring a Claim?
- The UAE law tries to find a suitable solution for all cases filed for labor claims. The UAE civil law is not flexible enough to develop new laws from cases that come to the Court as seen in other common law jurisdictions.
- However, in certain extreme situations, the UAE Courts can consider the case and find a suitable solution to provide the claim amount after the lapse of time without undermining Article 6.
- This can be possible in limited cases, and as per the discretion of the Courts, by empowering another law over the Article 6.
- This can be seen in cases where claims for gratuity are bought after the lapse of a one-year time period due to extreme health conditions and sicknesses or for other accepted reasons. This was noted to be possible by lawyers in a recent case of an ex-employee having faced serious health issues after losing the job, filed a claim for gratuity after five years. According to lawyers and the Civil law, there is a possibility of such claims to be considered by Courts on Humanitarian grounds and empower the law that secures the Human Rights of an individual.
There is a low probability for the Courts to successfully provide the plaintiff with the gratuity pay after the lapse of one year. It is in the best interest of every employee to be aware of the process of gratuity and other employment benefits that an employee is entitled to, and to claim the amount within one year of the termination of the employment.