Video: UAE Labour Law - insurance and gratuity benefits explained

Sun 17 Feb 2019 10:35 AM GST
Arabian Business reporter Shruthi Nair explains the provisions of the labour law that details insurance and gratuity benefits of every employee working in the UAE.

Abu Dhabi and Dubai applies compulsory insurance coverage for all employees: nationals and expatriate residents.

Now the scope of insurance varies, depending on the employee's salary, job position, and other matters.

Employers must provide health insurance for their employees and their families, which includes a wife and no more than 3 children under the age of 18.

The Dubai government requires employers to provide health insurance for their employees only without their families.

What happens in cases of an injury or death at workplace?

The UAE labour law covers it.

God forbid, if this happens, the compensation will be equal to the basic wage of the worker for 24 months, provided that the amount of compensation is not less than AED 18,000 or more than AED 35,000.

The amount of compensation is calculated on the basis of the last wage received by the worker prior to his death.

Now here’s a slightly complex one – end of service calculation.

If you’ve just joined a company, then you probably remember being overloaded with figures and percentages when your HR was taking you through the end of service monetary benefits.

Let me explain to you what the labour law says.

In the private sector, there are two main types of contracts: fixed-term contracts and indefinite contracts.

For a fixed term contract, a worker who has been employed for less than 5 years, he will be entitled to twenty-one days' pay for each year of service.

If the employee has been employed for more than five years, he shall be entitled to thirty days' wages for each year, which exceeds the first five years.

Now for indefinite term, if the employer has terminated the contract, i.e if you got fired, and this happens before you complete a year, then unfortunately you get no payment. The rest of the rules remain the same.

However, if the employee terminates the contract, i.e you quit and you’ve been employed for a period ranging from 1 to 3 years, then the end of service benefit calculated on the basis of one third (1/3) of the basic salary for 21 days for each service year.

(Source: Arabianbusiness.com YouTube channel)