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Does this replace the pension in the package one receives? It appears to me that it does that but also the redundancy payment, so one of these is missed out? Or am I missing something?

pension? in dubai? not that i'm aware of! you'll need to self-finance any retirement fund yourself

Agree 100% with the above, once you are a "contractor" you are responsible for your own provisions. The gratuity payment is an incentive payment to work out the full contract period, if you break the contract you forgo your gratuity. As you have no access to the payment during your employment its more of a severance payment. The money is not invested by the employer and is calculated according to your final basic salary (exclusive of perks).

Can an employer include your end of service gratuity payment in your daily rate of pay?
My employer has included a section in my contract stating that gratuity payment is included. I have refused to sign the contract for some 2 years now and are soon due to finish employment with them?
Any info would be much appreciated.

technically not, yet some do include it.
gratuity is supposed to be payable at the end of the contact, they include it in the salary to make your salary look slightly more than it would otherwise be. the downside for the company is that they cannot claim the gratuity back from you if you break the contract.

i would say that as you have been working for your company for 2 years you must have already signed your contract (whether you know it or not), without signing it you could not have been issued with a labour card, if you don't have a labour card after 2 years then the gratuity is the least of your problems.

Mine is approx 1 month salary for every year of employment, so about
8%. But it isn't invested, and therefore doesn't amount to as much as a proper pension which is what I understood it to be.
But I also understood this to be a dubai goverment requirement rather than an incentive by the employer.
Is this true?

thats correct, it's a provision of the federal labour law.
as you say it's not much and also not invested, but for some of the lower earners in dubai (unskilled labour), it can be a huge cash amount at the end of a contract. as some of these people simply extend thier contracts its quiet a large sum (for them) when they finally leave.

I have a question aboout gratuity and resignation, I am currently negotiating contracts from a job offer:

A HR manager tried to explain to me that if I were to resign within 3 years of joing under current labour law I would have to pay/owe the company an equivalent of 45 days pay and wouldn't get gratuity until after 3 years. Is this actually the case or are they being "cute" with me?

Termination and contract type:

It depends on what type of contract you were employed under. If it’s a Limited Term Contract then yes, he is correct and you are ending the contract before its date of termination. This means you will have to pay your employer the equivalent of 1.5 months’ salary (based on your basic salary). If your employer had wanted to terminate your employment earlier he would have to pay you 1.5 months’ salary.

If you are on an Unlimited Contract you only have to give him 30 days notice, and the same applies to him. No penalties are incurred by either party.

The type of contract is stipulated on the actual Labour Department Contract document

Gratuity:

Limited contract workers:
Workers employed on Limited contracts who leave their employer before the end of the contact terms are not entitled to a gratuity payment, unless they have been employed for longer than 5 years, which is normally indicative of a contract that has been extended for over one term.

Unlimited contract workers:
If the employee leaves the employer of their own free will after successfully completing not less than one full year and not more than three they are entitled to a 1/3, for service of between 3 and 5 years 2/3, and after 5 years a full gratuity payment.

Example:
Unlimited contract
Basic salary of 10,000 per month
Worked for 4 years

= 10,000/30 days * 21 days = 7,000 per year worked
= 7,000 * 4 years = 28,000
= 28,000 * 2/3
= 18,666