Have you ever completed your task in the UAE, anticipating being paid by the employer, only to realise that the employer has denied you the gratuity pay? It occurs much more frequently than you would imagine. The gratuity may be denied by the employers according to the UAE Labour Law; however, only within certain and valid reasons.

Most of the workers end up losing their end-of-service benefits merely due to a lack of knowledge of these regulations, or they accidentally contract a violation.

This guide will clarify the best 9 acceptable reasons your employer may refuse to pay you gratuity in the UAE, how to prevent such reasons, and what to do in case the gratuity is denied inappropriately.

Who Is Eligible for Gratuity in the UAE?

Making the reasons why I see the denial before I explain the reasons why anyone should be granted gratuity.

Gratuity is what you receive at the end of your service of service, it is a benefit that is offered to all full-time employees in the UAE who have served a continuous one year service. It is only calculated based on your basic salary and not on allowances, bonuses, or commissions.

Key Eligibility Rules (As per Federal Decree-Law No. 33 of 2021)

There must be one year of continuous service.
The calculation of gratuity is based on basic salary as opposed to total CTC.
Formula:
(Basic Salary ÷ 30) × 21 days × Years of Service (for up to 5 years), then 30 days per year after 5 years.
Any suspension or any unpaid leave will decrease the number of days of service you could receive.

Now that you are aware of the fundamentals, we are going to find out the best 9 reasons why your gratuity may be denied in the future, so that you can ensure the same does not befall you.

Top 9 Valid Reasons Your Employer Can Deny Gratuity Payment

1. You Didn’t Complete 12 Months of Continuous Service

This is what happens most of the time to employees and renders them ungrateful.

In case you resign or are terminated during less than one full year, you will not get any gratuity, even for 11 months and 29 days of work.

2. You Resigned Without Serving the Required Notice (Old or Unlimited Contracts)

If you are on an unlimited or legacy contract and leave without giving your notice (60 days on average), your employer has the legal right to refuse to provide your gratuity.

A sudden departure is regarded as a breach of contract, and according to the UAE law, that is all the employer can do to deny the end-of-service benefits.3 You Abandoned a Fixed-Term (Limited) Contract Precociously without any valid excuse.

Your employer has the option of refusing gratuity in the event you resign before the expiry of the contract term, under a limited contract, and without a good reason.

As an illustration, when you signed a two-year contract at the expiry of which is in December 2026, but instead in April 2026, you resigned just because of a better job opportunity, your employer can deny you any gratuity since you breached the agreement.

4. You Were Terminated for Gross Misconduct

This is a serious one. When your employer fires you, without any warning or even without any gratuity, it is legal in case you are dismissed due to gross misconduct.

In the UAE, the gross misconduct as provided by Article 44 of the UAE Labour Law is:

Stealing, committing fraud, or forgery.
Corporeal attack or harassment.
Drinking liquor at the workplace.
Disclosing company secrets
Multiple unreasonable absenteeism.

5. You Worked for Another Employer During Leave (Unauthorised Side Job)

This is what many employees are not aware of; when you work under another employer in the case of annual, sick or unpaid leaves without prior written approval, then your employer may terminate you and refuse gratuity.

This is perceived as employment fraud in the law. You are not to stay away from work without permission.

6. You Ignored Repeated Warnings or Failed to Perform Duties

In case your employer has given you several warnings in writing regarding poor performance, lateness, or negligence, and you fail to change, they can fire you on these grounds.

This does not necessarily imply a complete forfeiture, but employers may minimise or refuse gratuity based on serious and repeated negligence.

7. You Caused Deliberate or Negligent Damage to Company Property

Your employer can deduct or deny your gratuity in case he can establish that you willfully or negligently damaged company property or created a loss.

For example:

Deletion of valuable company information.
Squandering important customer bases as a result of carelessness.
Destroying the office equipment or vehicles.

8. You Were Terminated During Probation Period

The last thing is that even when you are fired during probation time (this can be up to six months), you cannot claim gratuity at all.

According to the law, it is very clear that the gratuity should be given after one year of uninterrupted service.

9. Unpaid Leave Periods Reduce Your Service Tenure (Legacy Contracts)

According to old UAE labour regulations, this unpaid leave was not factored into the years of service.

Assuming that you had worked two years and had taken three months leave, which was not paid, the amount of your gratuity would be computed on the 21 months rather than 24.

Though this rule can be applied to older contracts since the new law (since 2022) is more flexible, it can still be adhered to.

What You Should Do If Your Gratuity Is Denied

When your boss will not pay gratuity and you think that it is not fair, do not panic. There are legal ways of getting back what you have lost.

1. Request a Written Explanation

Request your HR or employer to give a written notice of denial of gratuity and a final settlement sheet. In this document, the denial can either be proven as justified or a mistake.

2. Review Your Contract Terms

Determine your limited or unlimited contract, the term of notice, and termination provisions.

In some cases, the denial of gratuity occurs just due to the fact that the HR department adhered to the old contract rules.

3. Contact MoHRE (Ministry of Human Resources & Emiratisation)

In case your employer does not address the matter, address MOHRE by:

Calling 800-60 (UAE Labour Helpline)
Going to a Tawafuq or Tasheel Centre.
Filing a complaint through the MoHRE mobile application or web page.

4. File a Labour Case If Needed

In the hope that your employer still denies you pay, MOHRE will permit you to bring the case to the Labor Court.

You do not need an attorney; all you need to do is prepare your papers:

Offer letter and contract
Salary slips
Resignation notice or termination notice.
Any written correspondence with HR.

Frequently Asked Questions (FAQs)

Is it legal to deny gratuity by my employer in the UAE?

Yes, but under particular reasons like excessive misconduct, quitting less than one year beforehand, or going against contractual provisions. Otherwise, your employer is required to pay your gratuity in respect of the UAE Labour Law.

How about a gratuity for resigning within the first year of service?

No. To be eligible to receive gratuity, you have to fulfil a minimum of one year of continuous service with your employer in the UAE.

What will happen if I am dismissed without reason?

In case your employer dismisses you without any lawful reason, you still have the right to get your full gratuity according to the laws of labour in the UAE.

Is the amount of gratuity lower when one resigns?

Yes. Upon taking a resignation after one year, the gratuity to be paid will be based on the employee’s length of service; that is, you can receive 1/3, 2/3, or the full amount, depending on the years of service.

What can I do to assert unpaid gratuity in the UAE?

You can submit a labour complaint at the MoHRE website or refer to a Tawafuq Centre and get your case solved in no time, and receive your unpaid gratuity as well.

Final Thought

Understanding what valid reasons can make your employer refuse the gratuity will help you avoid expensive errors and ensure that you receive the necessary payment. Do not allow misconception and ignorance to deprive you of what you have worked hard to have.

In case your gratuity has not been paid due to any other reason, go through your contract and approach MOHRE and claim the gratuity in court. Keep in mind, bribing is not a privilege in the UAE, but a right. Be updated and defend what you have worked hard to earn.