What exactly is Gratuity or End-of-Service Benefit (EOSB)?
Gratuity/EOSB is a statutory payment made by an employer to an employee at the end of their service period in the UAE. It's mandated by the UAE Labour Law as a form of recognition for the employee's service, provided they have completed at least one continuous year with the company.
Gratuity, also known as End-of-Service Benefit (EOSB), is a crucial component of UAE employment law:
Definition & Purpose
- Statutory payment from employer to employee at service end
- Recognition of employee's service and loyalty
- Mandated by UAE Labour Law (Federal Decree-Law No. 33 of 2021)
- Provides financial security for employees transitioning between jobs
Key Requirements
- Minimum one year of continuous service required
- Applies to both resignation and termination scenarios
- Calculated based on last drawn basic salary
- Payment due within 14 days of service end
Legal Framework
- Governed by UAE Labour Law
- Updated regulations effective from 2023
- Applicable across all UAE emirates
- Enforceable through UAE courts and labor departments
