UAE Labour Law on Gratuity and Non-Extendable Probation Periods

Under UAE Labour Law, employees are not entitled to gratuity during the probation period, which is limited to six months, ensuring a fair and transparent employment process.

Gratuity Entitlement During Probation Under UAE Labour Law

Gratuity is a financial benefit that employees receive at the end of their employment, calculated based on their basic salary and years of service. In the UAE, workers typically do not qualify for gratuity if their employment ends during the probation period. Here’s why:

• The probation period is generally only six months, which doesn't provide enough time to accumulate the required service for gratuity benefits.
• Probation is seen as a trial phase for both parties, and gratuity is often viewed as a reward for long-term service, not for short-term or temporary employment.
• Offering gratuity during probation could place a financial strain on companies if new hires do not meet expectations.

However, there are exceptions. If an employee can prove wrongful termination or a violation of their rights during probation, they may still be entitled to gratuity. Clear communication in employment contracts regarding gratuity entitlements is essential to avoid confusion. Employers and employees alike should have a transparent understanding of when gratuity applies to foster a fair working relationship.

No Extension of the Probation Period in the UAE

The UAE Labour Law mandates that the probation period cannot exceed six months under any circumstance. This rule ensures that employees aren’t left in a prolonged state of uncertainty regarding their job status. If an employer attempts to extend probation beyond this limit, employees have the right to file a complaint with the UAE Ministry of Labour, which may take legal action to enforce compliance.

For employers who feel that six months isn't enough time to fully assess an employee, especially in specialized roles, alternative options can be considered, such as:

• Permanent Role with Extended Training: The employee can transition to a permanent position while continuing to receive specialized training.
• Short-Term Contracts: Employers may offer a contract that extends beyond six months, allowing more time for evaluation without violating the probation regulations.

Clear agreements must be in place if these alternatives are pursued to ensure transparency. This approach helps both employers and employees follow UAE labour laws while maintaining a clear and fair hiring process.