One of the most persistent fears among UAE employees: “if they fire me for cause, I lose my gratuity.” That was true under the old law. It is not true anymore – and knowing the current rules can save you from accepting a settlement you should not.
The old forfeiture rule is gone
Under the pre-2022 law, Article 120 dismissal for gross misconduct could forfeit your entire gratuity. Federal Decree-Law No. 33 of 2021 removed that penalty. Today, even an employee dismissed without notice for serious violations under Article 44 – assault, fraud, disclosing secrets, repeated warnings – keeps the gratuity earned for completed service. Dismissal for cause costs you the notice period and possibly your job market reputation, not your accrued end of service money.
What CAN reduce your final payout
Gratuity itself is protected, but the settlement it sits inside can shrink. Legitimate deductions include: outstanding loans and salary advances, compensation in lieu of notice if you left without serving it, documented damages awarded through proper process, and recovery of specific contractual costs. What employers cannot do is invent deductions – visa costs, “training bonds” beyond legal limits and vague damage claims are the classic overreaches. Compare your employer’s figure against the final settlement calculator before signing anything.
Absconding cases
Abandoning a job without notice creates real legal problems – an absconding report, possible work ban and compensation owed to the employer for the notice period. But the gratuity for your completed years of service remains a legal entitlement even then; it can be offset against what you owe, not simply confiscated. If you are in this situation, MOHRE mediation is still open to you.
The legacy exception
Service completed before February 2022 on an unlimited contract can still be calculated under the old rules in some transitions, including the resignation reductions – the unlimited contract calculator covers those. For all service under the current law, the reductions and forfeitures are history.
If your employer withholds gratuity anyway
Do not sign a full and final settlement you dispute. File with MOHRE (80060) – it is free, starts with mediation, and unresolved cases go to labour court where filing fees are waived for claims under AED 100,000. The 14-day payment deadline of Article 53 works in your favour as evidence of delay. Calculate your exact entitlement first with the gratuity calculator so you negotiate from the law, not from hope.
Information only, not legal advice. Verified 6 July 2026.