For a qualifying employee under the standard UAE private-sector framework, termination normally uses the same end-of-service gratuity formula: 21 days of basic wage for each of the first five years and 30 days for each later year. The reason for termination can affect other settlement items, but it does not create a separate gratuity rate.
How to calculate gratuity after termination
- Confirm at least one year of adjusted continuous service.
- Use the last monthly basic salary.
- Subtract unpaid absence from service.
- Apply 21 days for years 1–5 and 30 days after year 5.
- Check the cap, work pattern and any special jurisdiction.
Does dismissal without notice remove gratuity?
The current Article 51 formula does not state that a worker automatically loses gratuity merely because the employer terminates employment without notice under a dismissal provision. This differs from many old articles based on the repealed labour law. The employer may still make deductions that are permitted by law or judgment, and a disputed case depends on the evidence and applicable authority.
Termination with notice
Either party may terminate a current employment contract for a legitimate reason by giving written notice in accordance with the contract and law. If the employer makes the worker serve notice, that period is normally part of employment. If notice is not served, payment in lieu of notice may be a separate final-settlement line.
Unlawful termination compensation
UAE law provides a specific unlawful-termination remedy when dismissal is connected to a serious complaint filed with MOHRE or a proven case against the employer. Any court-awarded compensation is separate from gratuity, notice pay and other entitlements.
What should appear in a termination settlement?
| Settlement line | What to verify |
|---|---|
| Salary | Payment through the final working day |
| Gratuity | Basic salary, eligible service and 21/30-day formula |
| Unused annual leave | Legally due leave balance and basic-wage cash allowance |
| Notice pay | Notice served or payment in lieu |
| Commission or incentives | Contractual terms and whether the amount had become due |
| Deductions | Written reason, calculation and legal basis |
| Unlawful-termination compensation | Only where legally established or agreed |
Payment deadline
Article 53 states that wages and other employment entitlements should be paid within 14 days from the contract end date. Keep evidence of the last working day and request an itemised settlement before signing an acknowledgement.
Official references
- UAE Labour Relations LawArticles 43–47 cover termination-related issues; Articles 51 and 53 cover gratuity and payment timing.
- UAE Government: terminating employment contractsOfficial overview of termination and notice requirements.