Understanding UAE Labour Law: Gratuity, Leave, and Termination Rights 2026

UAE Federal Decree-Law No. 33 of 2021 (and its executive regulations) replaced the previous labour law and governs employment in the private sector across the Emirates. Whether you are an employee checking your gratuity, leave, or termination rights, or an employer ensuring compliance, this guide summarises the key rules and points you to official MOHRE sources and our calculators for your own numbers.

Federal Decree-Law No. 33 of 2021 Overview

Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations came into force in February 2022 and applies to most private-sector employment in the UAE (including free zones that have not opted for their own labour regime). It introduced clearer rules on contract types (limited vs unlimited), end-of-service gratuity, leave, working hours, and termination. The Ministry of Human Resources and Emiratisation (MOHRE) issues implementing decisions and circulars that clarify how the law is applied in practice.

Key concepts include: limited contract (fixed term, with a defined end date) and unlimited contract (open-ended, subject to notice). Your contract type affects gratuity entitlement and notice periods. Employers must register contracts in the MOHRE system and comply with wage protection; employees can verify their contract and raise disputes through MOHRE channels.

Gratuity Calculation: Limited vs Unlimited Contracts

Gratuity (end-of-service benefit) is calculated on your basic salary only, not on allowances (housing, transport, etc.), unless your employment contract or company policy explicitly includes them. Under the 2021 law:

• 1–5 years: 21 calendar days of basic salary for each year of service (first five years).
• After 5 years: 30 calendar days of basic salary for each additional year. The total gratuity cannot exceed the equivalent of two years’ basic salary.

For limited contracts, if the employee resigns before the contract end, gratuity may be reduced according to the law (e.g. no gratuity if they leave before completing one year, or reduced if they leave early by agreement). For unlimited contracts, resignation with proper notice typically entitles the employee to gratuity for the years served under the same rules above. If the employer terminates without cause, the employee is generally entitled to full gratuity plus possible compensation.

Annual Leave Entitlements

Under the 2021 law, employees are entitled to annual leave of at least 30 days per year (for those who have completed one year of service). For service of between six months and one year, the employee is entitled to two days of leave per month. Leave is typically paid at full wage. Employers may set leave dates; unused leave can sometimes be carried over or paid out according to the contract and policy, subject to the law.

Additional leave types include sick leave (as per the law and company policy), bereavement leave, and maternity leave (90 days for the mother, with specific conditions). Check your contract and MOHRE guidelines for your exact entitlements.

Termination Notice Periods

For unlimited contracts, the law requires a minimum notice period of 30 days (or more if the contract states a longer period), and up to 90 days in some cases. During notice, the employee is entitled to full pay and benefits. For limited contracts, termination before the contract end date is only in specified cases (e.g. mutual agreement, serious breach, or force majeure); early termination by the employer without a lawful reason can lead to compensation.

If an employee resigns, they must give written notice as per the contract. Failure to work during the notice period can have consequences (e.g. deduction of salary for days not worked). Probation periods have special rules: shorter notice may apply, and both parties have specific rights — check your contract and MOHRE circulars.

End-of-Service Benefits

End-of-service benefits include gratuity (as above), repatriation ticket to the country of origin (for non-nationals, unless otherwise agreed), and any accrued but untaken leave (paid out if the contract or policy allows). The employer must settle all dues within 14 days of the end of the employment relationship, unless otherwise agreed in writing.

Ensure you receive a final settlement statement showing gratuity, leave balance, and any other amounts. Disputes over the calculation can be raised with MOHRE.

MOHRE Complaint Process

If you believe your employer has not paid gratuity, leave, or other dues, or has terminated you in breach of the law, you can file a complaint with MOHRE. The process usually starts online (MOHRE portal or app) or at a Tasheel / Tawafuq service centre. MOHRE may attempt conciliation; if that fails, the dispute can be referred to the labour court.

Keep copies of your contract, payslips, termination letter, and any written communication. Time limits apply for lodging claims, so act promptly. Legal advice is recommended for complex cases. Official information is available on the MOHRE website and through their official circulars.

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