Dubai Forums Dubai Expat Forums Dubai Expat Help Forum

My company are terminating my 1 year contract at the end of my term (although as I guess it's ending it probably doesn't need terminating). However, they are going to make a new contract for a further 12 months. The contracts will be quite different in terms on pay and allowances.

My question is, should they pay my gratuity when the first term ends or pay me the whole lot when I eventually go home?

Now my pay is increasing for the 2nd term how will this affect the gratuity? THanks in advance.

john smith wrote:My company are terminating my 1 year contract at the end of my term (although as I guess it's ending it probably doesn't need terminating). However, they are going to make a new contract for a further 12 months. The contracts will be quite different in terms on pay and allowances.

My question is, should they pay my gratuity when the first term ends or pay me the whole lot when I eventually go home?

Now my pay is increasing for the 2nd term how will this affect the gratuity? THanks in advance.

As I remember it the gratuity relates to "end of service" not end of contract (although arguably all service is under contract but it could also be service under multiple contracts). The contract is terminated as it terminates by operation of law at the end of its term (unless it specifically states that it is renewable). The question is whether the gratuity applies since there would be "no end of service" since you will remain employed albeit under a new contract. It all depends on the situation. As an Employer I would argue that it does not apply as the intent of the law is to provide a certain compensation to an employee at the "end of the service". Tthat is, when you leave the company. As an employee I would argue that since the contract is terminated my services have ceased and I am entitled to a gratuity (which I factored into accepting the job). I would argue that the new contract represents new services, etc. It may be up to the "bargaining" position you may have.

Personally I would ask for the gratuity but...

But surely I would be entitled to 2 years worth if a do another year?

Talk to your company if it's possible to "accumulate" your total service in the company eventhough it involves multiple contracts. Keep all your contracts copies. Longer service means bigger gratuity (percentage to your basic salary).

See my earlier post about gratuity calculation.

The gratuity is calculated based on your last salary, so it is always better to let it continue if your salary is increased.

john smith wrote:But surely I would be entitled to 2 years worth if a do another year?

surely.