Unified UAE Legislation Database

FAQ: Can End of Service Benefits (EoSB) be replaced upon termination by a percentage of the company’s profits if such a condition is stated in the employment contract?

Status

In force

Issuing Authority

Effective date

XX.XX.XXXX

Official Link

https://

Answer: No, this is not allowed. Such a condition would be considered invalid if it puts the employee in a worse position than what is stipulated by law.

 

Legal Basis:

Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relationships:

- Article 51(2): End of Service Benefits are due to the employee upon termination.

- Article 65(3): Any contractual term that violates the law or is less favourable to the employee shall be deemed void.

 

Relevant case law:

Case No. 4 of 2025 / Dubai Court / Objection, labor Show Judgement 

 

455 / Labour Appeal No.1 of 2025 / Dubai Court of Cassation