The Tripartite Structure of UAE Employment Law
Employment regulations in the UAE are categorized into three primary jurisdictions: the Mainland (governed by MOHRE), Domestic Workers, and Free Zones. Each sector operates under specific legislative frameworks, most notably Federal Decree-Law No. 33 of 2021 regarding the Regulation of Employment Relationships for the private sector. Understanding which jurisdiction applies is critical for accurately determining an employee's entitlement to end-of-service gratuity.
Mainland and Private Sector Gratuity
For employees in the private sector, gratuity is calculated based on the last basic salary. Employees who have completed at least one year of continuous service are entitled to 21 days' basic salary for each year of the first five years, and 30 days' basic salary for each additional year. It is important to note that the total gratuity cannot exceed two years' total remuneration.
Domestic Workers and Free Zone Jurisdictions
Domestic workers are governed by Federal Law No. 10 of 2017, which provides distinct provisions for their end-of-service benefits. Conversely, financial free zones like the DIFC and ADGM have their own independent employment laws (e.g., the DIFC Employee Workplace Savings - DEWS plan), which have shifted from traditional gratuity to defined contribution schemes. Employers must ensure compliance with the specific regulations of their licensing authority to avoid legal disputes.