More UAE firms to pay gratuity in instalments

Laid-off staff can choose legal options to speed up payments

Hit by cash flow concerns, more companies in the UAE are trying to pay off their gratuity settlements in instalments for laid-off employees. These delays are also cropping up on other end-ofservice payouts such as arrears in salary and pay-in-lieu for holidays not taken.

Faced with such demands from their ex-employers, what can the affected employees do? In the current economic climate, the best option still remains engaging in negotiations with the employer.

It is prudent to reach a compromise if necessary — for example, exploring payment by instalments.”

Emily Aryeetey | Senior Associate, Stephenson Harwood ME

“It is prudent to reach a compromise if necessary — for example, exploring whether payment by instalments would be agreeable,” said Emily Aryeetey, Senior Associate, Stephenson Harwood M.E. “And if a mutually acceptable agreement cannot be reached, then an employee can raise a complaint.

“Usually, an employee will need to file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).

Or if they are employed by a free zone company, directly with the free zone authority.

“If the dispute cannot be resolved, employees will be granted papers permitting them to pursue the matter before the Labour Court.”

Market sources say the majority of dismissed/retrenched employees are opting for the instalment schemes offered. Their thinking is that rather have the assurance of getting all their dues at some point rather than choose the — expensive — legal option. (Or even taking a cut on their gratuity dues for the option to be paid now.)

Lengthy process

“Given the current circumstances with courts going online and a lot of companies turning bankrupt, the trial might happen after a year of litigation,” said Michael Kortbawi, Partner, BSA Ahmad Bin Hezeem & Associates.

“Employees have to be careful. If you have lost your job, you need funds to pay for rent and other expenses. If you litigate, it does not mean you will get your money immediately.

“If you are lucky, you get it after six months.”