Is notice period included in UAE employee's gratutity computation?

I have worked for a private company under an unlimited contract for almost five years. I am planning to submit my resignation after four years and 11 months with the purpose of serving a one-month notice period so that I complete full five years of employment. That way I will be eligible to get the […]

I have worked for a private company under an unlimited contract for almost five years. I am planning to submit my resignation after four years and 11 months with the purpose of serving a one-month notice period so that I complete full five years of employment. That way I will be eligible to get the End of Service Benefit of 21 days’ salary for each year of the five years worked. My understanding is that the notice period is also counted for gratuity calculation. Is that correct? In this case, if my employer does not want me to serve the entire notice period of 30 days, will I still be eligible to get the full benefits for the five years? Other employees have resigned and after a week were ordered by our employer not to come to the office anymore even though both of them were willing to serve the full notice period. GN, Abu Dhabi

When calculating the length of service, the full amount of time worked plus the notice period must be included. While an employer can request that an employee no longer comes to the workplace, a common practice for salespeople, they are still an employee until the end of the specified notice period. This means that the employment visa and all other benefits, such as medical insurance, must remain valid until the end of the notice period. If GN gives 30 days’ notice after four years and 11 months, that will give him five years of service, but if this happens in a month with 31 days, he might want to wait a few more days in case the employer tries to be pedantic. The full period of five years is relevant because if an employee resigns sooner the gratuity payment will be reduced.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with more than 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.

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Source: Business

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