- Legal Articles
- Ask Elhais
February 03, 2022|
The United Arab Emirates has issued the new Federal Decree-Law No. 33/2021 on Regulation of Labor Relations (the “new labor law”), which repeals the long-held Federal Law number 8 of 1980. The new labor law has been implemented with the twin objectives of ensuring the efficiency of the UAE’s employment sector by retaining its allure in attracting and maintaining the best, competent and future skills driven workforce and thus providing an attractive business environment for employers in the country. The new labor law particularly also focuses on regulating the rights and obligations of both the employer and employees in a balanced manner and thus, introduces many key regulations and changes.
The new labor law applies to all establishments, employers and workers in the private sector in the UAE. However, it excludes in its application employees of federal and local government entities, members of the armed forces, police and security as well as domestic workers.
Calculation of gratuity:
In order to understand the concept of gratuity under the new labor law, the following key terms should be understood first.
Gratuity is calculated based on an employees’ basic wage. ‘Basic wage’ refers to, ‘the remuneration stipulated in the employment contract, which is given to the employee or worker in return for his work under the employment contract, on a monthly, weekly, daily, hourly or piecework basis, and does not include any other allowances, commissions, or benefits in kind’. While ‘Remuneration’ refers to “the basic salary in addition to the cash allowances, commissions and benefits in kind that are prescribed for the employee or worker”. Thus, the total salary of an employee is considered his remuneration, whilst the gratuity for an employee will be calculated only on the ‘basic wage’ and not the remuneration.
The basic wage will be as accorded in the labor contract for the said employee, and the gratuity will be calculated as follows:
The new labor law has thus incorporated definitive rules in place governing employment relations in the UAE. The new changes seek to introduce both flexibilities, as well sustainability in the UAE’s employment sector by addressing the developments as well as the exceptional circumstances that might arise in an employment relationship.
Copyright © of this article is retained by the author and/or other copyright owners. We explicitly grant you permission to download a copy, without any alteration, of this article for personal non-commercial research or study, without prior permission or any charge. This article can be utilized on your website or for marketing, however, we grant you permission to host this article on your website and no other rights. This content should not be altered in any way or sold commercially in any format without prior permission of the copyright holder. During reference of this article, full biographic details entailing the name of the author, his designation, the institute and the publishing date of the article shall be provided.
Your email address will not be published. Required fields are marked *
I owe the success of my case to Dr. Hassan's diligent approach. He remained focused, put me at ease and always went the extra mile. Dr. Hassan tirelessly put my case in the best possible light and I cannot thank him enough. I would highly recommend Dr. Hassan - I am grateful to him from the bottom of my heart.
Dr. Hassan Elhais is among the best legal consultants I have ever worked with. He has an amazing ability to reduce complex issues into a simple concept that non-legal people can understand. He consistently develops innovative litigation strategies that help us to achieve our ultimate legal goals.
...the extraordinary effort that has been exerted by the staff, and we specially thank Dr. Hassan Mohsen Alhais. Wishing your continues success & excellence...
I believe everyone should recognize what a difference Dr. Hassan Elhais work has made to people's lives; and especially to our family's life, because we will remain forever grateful to each and every one of his team.
Dr. Hassan Elhais never fears cases that involve exposure and he always gives me his honest assessment of our chances of success, which is invaluable to me.
He aided us not only in providing legal advice but also in all legal issues that required a long term strategic approach to achieve most favorable and optimum outcomes he provided us with high level of professional service.
Dr. Hassan Elhais is a responsible, reputable counsel who operates to high levels of service.
Dr Hassan Elhais is responsive, thorough and creative with his advice, and is a valued advisor and legal consultant.
Regardless of the complexity of the matter I know Dr. Hassan Elhais will consider not only legal strategy but also business practicalities in providing advice and litigation options.
I recommend Dr. Hassan Elhais to anyone who says 'I'm in legal trouble'. I was extremely satisfied with the high standard of his work. He has always been there when I have needed him and I refer all my clients, family and friends to him/his firm.
Dr. Hassan Elhais was very professional and he listened to my needs. He was very prompt, efficient and always kept me informed. Dr. Hassan Elhais's service was excellent and I would definitely recommend him to friends and colleagues.