FAQ: When end-of-service gratuity (EoSB) is not paid upon termination? What are legal grounds and references under UAE Labour Law?

ANSWER

General rule — Article 51, Federal Decree-Law No. 33 of 2021

The right to EoSB does not depend on:

• who initiated the termination (employer or employee)

• whether a fixed-term contract expired or was terminated early

• the reason for dismissal

The only ground for non-payment of EoSB:

• the employee has worked for the employer for less than 1 year

If the employment period is 1 year or more, EoSB must be paid regardless of termination circumstances.

Partial payment / deductions from EoSB

Separately from the non-payment rule, there are cases where the employer may pay EoSB not in full (i.e., make deductions from the total amount).

• Grounds for such deductions are listed in Article 29, Cabinet Decision No. 1 of 2022 on the Executive Regulation of Federal Decree-Law No. 33 of 2021 on Employment Relationship.

Legal references