Worked in the UAE on an unlimited contract signed before February 2022? The old Federal Law No. 8 of 1980 treated resignation very differently from termination – and those legacy rules can still matter when employers calculate gratuity for service completed under the old regime. This calculator handles both the legacy reductions and the current law.
What was an unlimited contract in the UAE?
How did resignation reduce gratuity on unlimited contracts?
My contract converted to fixed-term - which rules apply to me?
The old resignation penalty explained
On unlimited contracts under the 1980 law, an employee who resigned received a reduced gratuity: one third of the accrued amount with 1 to 3 years of service, two thirds with 3 to 5 years, and the full amount only after 5 years. If the employer terminated the contract, gratuity was always paid in full. This asymmetry is why “resign or wait to be terminated” was such a common dilemma before 2022.
What changed in February 2022
Federal Decree-Law No. 33 of 2021 abolished unlimited contracts entirely – every contract converted to fixed-term – and removed the resignation penalty. For service after the conversion, full gratuity applies regardless of how the employment ends. Calculate that portion with the main UAE gratuity calculator.
Which rules does your employer apply?
Practice varies. Many employers simply apply the current, more generous law to the entire service period. Some split the calculation: legacy rules for pre-2022 service, new rules after. The law’s transition provisions favour the employee reading in most cases – if your employer applies a reduction you believe is wrong, raise it with MOHRE on 80060 before signing your final settlement. See also the resignation gratuity calculator for scenario comparisons.
Estimates for information only, not legal advice.