End-of-service gratuity on ‘basic pay’ as in contract: Dubai Court

End-of-service gratuity of an employee is calculated based on the basic salary mentioned in the employment contract, according to a new principle issued by the Dubai Court of Cassation.The court was delivering its verdict in a case forwarded by the Labour Office where the worker asked his employer to pay him dues of about Dh550,000 as he was earning a monthly salary of Dh4,000 and that he was dismissed arbitrarily after 15 years of service.

The court based its verdict on the fact that the basic salary mentioned on the worker?s contract is Dh1,500, and, therefore, his end-of-service gratuity will be calculated on that.The dispute went to the court when the employer refused to accept the worker?s demand and resorted to abide by the employment contract signed.

The Court of First Instance ruled that he deserved Dh22,500 as gratuity and a ticket to his home country if he did not take up another job.The worker, however, rejected the verdict and appealed to the higher court.

The Court of Cassation upheld the lower court?s verdict. The court based its judgment on the Labour Law No. 12 of 1980, and Article 36 of the Law of Evidence.

The Court of Cassation stressed that the employment contract signed by both the employer and the employee is the only reference in the event of any dispute. And written evidence is required to prove a breach of contract.