Gratuity Rights in UAE 2025 – Company Shutdown, Absconding, Suspension

If your company shuts down, you’re accused of absconding, or you’re suspended, figuring out your company shutdown gratuity UAE rights can feel confusing. This guide explains the gratuity formula, the 14-day payment rule, and how absconding or suspension affects your end-of-service benefits—backed by MOHRE and UAE Labour Law.

👉 Quick shortcut: use our gratuity calculator UAE or, if you work in a free zone, try our Free Zone Gratuity Calculator.

Gratuity Formula Basics

• Eligible after 1+ years of continuous service.
• Formula: 21 days’ basic wage per year for the first 5 years; 30 days thereafter.
• Cap: maximum gratuity = two years’ wage.
• Unpaid absence days do not count toward service.

Example

• Basic salary AED 10,000; service = 4 years
• Gratuity = 4 × 21 × (10,000 ÷ 30) ≈ AED 28,000

Company Shutdown: Your Rights

Closure or bankruptcy is a valid reason to end a contract (Article 42). If you’ve completed a year, gratuity is due under the formula. Employers must pay all dues within 14 days of contract end (Article 53).

Worked example:
3 years’ service; basic AED 12,000
Gratuity = 3 × 21 × (12,000 ÷ 30) ≈ AED 25,200

✅ What to do now

1. Collect your contract, payslips, Emirates ID, labour card.
2. Email HR requesting a gratuity statement (cite Art. 53, 14-day rule).
3. If unpaid, file a case via MOHRE website/app or call 600 59 0000.
4. If still unresolved, MOHRE forwards to court (claims ≤AED 50k can be settled directly).

Absconding (Unlawful Absence)

Definition: absence >7 consecutive days or >20 intermittent days without excuse (Article 44). Employers can dismiss without notice; a one-year work-permit ban may follow (Article 50).

➡️ Important: EOS gratuity is generally still preserved under the 2021 Labour Law if you meet the basic eligibility.

If wrongly accused:

• Keep proof (leave approvals, medical notes, timesheets).
• File complaint via MOHRE (app/site/600 59 0000).
• MOHRE resolves claims ≤AED 50k; bigger cases go to labour court with MOHRE’s file attached (Article 54).

See full steps in our UAE gratuity dispute guide.

Suspension: Paid vs Unpaid

Employers may suspend staff for up to 30 days during investigations, paying 50% wages. If cleared or only warned, withheld pay must be returned (Article 40).

• Paid suspension days count toward service.
• Unpaid suspension days do not (Article 51(4)).

Example:
3 years + 3 months; basic AED 11,000; 15 days on 50% pay
→ Days count; total gratuity ≈ AED 25,025

👉 Cross-check with the gratuity calculator UAE.

Free Zone Nuances

• ADGM: mirrors mainland 21/30-day gratuity model.
• DIFC: from Feb 1, 2020, EOS gratuity stopped accruing; employers contribute monthly to DEWS. Pre-2020 service remains on the old formula.

Use our Free Zone Gratuity Calculator for quick estimates.
For domestic staff, rules differ—see UAE Domestic Worker Gratuity.

Comparison Table

For JAFZA free zone staff, check how JAFZA gratuity rules apply under standard labour law.

Common Mistakes

• Forgetting to add paid suspension days to service.
• Assuming gratuity is lost upon dismissal → usually still due under 2021 law.
• Missing the 14-day payout deadline after shutdown → escalate if unpaid.
• Confusing mainland vs free-zone rules (DIFC DEWS, ADGM formula).

FAQs

Conclusion

Your company shutdown gratuity UAE doesn’t vanish in tough scenarios—whether shutdown, absconding, or suspension. Employers must follow the 14-day payout rule and MOHRE can enforce it.

👉 Run your numbers with the gratuity calculator UAE.
👉 If you face a dispute, start with MOHRE or check our gratuity dispute guide.

You’ve earned it—make sure you claim it.

Help other expats by sharing this guide!

Author Bio

Written by Noor Al Emarat — Editorial Team at Gratuity Calculator UAE. The team focuses on accurate, practical guidance covering gratuity calculations, HR processes, and UAE labour law. Every article is carefully reviewed to help both employees and employers understand end-of-service benefits and workplace rights with confidence.