Reasons Your Employer Denies Gratuity Payment

Encountering a situation where your employer denies gratuity payment can be immensely stressful, especially after dedicating yourself to a job for a significant period. However, it’s crucial to be aware of your legal rights as an employee under the UAE New Labor Law. This guide aims to shed light on the key legal aspects surrounding employer denials of gratuity payment and provides insights on how to address such situations effectively.

Understanding Employer Denials of Gratuity Payment: Legal Aspects

Employer denials of gratuity payment can stem from various reasons, some of which are outlined below:

  1. Incomplete Service Period: Employees may not be entitled to gratuity if they haven’t completed one year of service with the employer, as mandated by UAE Labor Law.
  2. Fixed-Term Contract: Article 138 specifies that employees under fixed-term contracts are not eligible for gratuity if they leave their job before completing five years of service.
  3. Resignation Without Notice: Article 139b states that employees under unlimited contracts may forfeit gratuity entitlement if they resign without providing adequate prior notice.
  4. Violation of Company Rules: Employers may withhold gratuity if employees violate company rules, engage in illegal activities, harass colleagues, or cause property damage.
  5. Absenteeism: Article 120 permits employers to dismiss employees without notice if they are absent for more than seven consecutive days or 20 non-consecutive days in a year without a valid reason.

Actions to Take if an Employer Denies Gratuity Payment:

If faced with a denial of gratuity payment, employees should take immediate action by filing a complaint with the UAE Labor Office. Legal recourse through the Labor Court may be necessary to resolve disputes effectively.

Dealing with Claims of Non-availability of Gratuity Funds by a UAE Company:

Under UAE Labor Law, employers are obligated to pay gratuity to employees upon completion of one year of service. If a company claims non-availability of gratuity funds, employees should file a complaint with the appropriate authorities for resolution.

Addressing Denials of Gratuity Even after Court Orders:

In cases where employers continue to deny gratuity payment despite court orders, the execution court has the authority to seize the company’s assets and liquidate them to settle the owed amount to the employee.


Employees in the UAE must be knowledgeable about their legal rights and company regulations regarding gratuity entitlements. In the event of an employer’s refusal to pay gratuity, employees should take proactive steps to seek resolution through legal channels, ensuring their rights are upheld and gratuity entitlements are received in accordance with the law.

By staying informed and assertive, employees can navigate challenges related to gratuity payment denials and safeguard their interests effectively. If faced with such a situation, don’t hesitate to seek assistance from the UAE Labor Office or relevant authorities to ensure fair treatment and compliance with labor regulations.

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