UAE Jobs: Can bonuses be included in employment contracts? – information

Bonuses must be paid if they are mentioned in the employment contract

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question: I am thinking about looking for a job in UAE. Are bonuses common in China? What about tip? Can I add these aspects to my employment contract?

Reply: Based on your inquiry, it is assumed that you have received a full-time job offer from an entity in the UAE mainland. Accordingly, Federal Act No. 33 of 2021 on the Regulation of Employment Relations (“Employment Act”) and Cabinet Resolution No. 1 of 2022 on the implementation of Federal Act No. Cabinet Resolution”) applies.

Employers may, at their discretion, award bonuses to their employees. The Labor Code says nothing about mandatory bonus payments. However, an employer can pay a bonus to an employee as one of the benefits in the employment contract. It can also be specified individually.

If a bonus is mentioned in the employment contract, it must be paid. Therefore, you can ask your employer to include it.

Clause 4 of Article 14 of Cabinet Resolution No. 1 of 2022 mentions that any employer in the UAE employing more than 50 employees is required to establish regulations related to promotion and rewards. However, the above legal provisions do not clarify whether the word “reward” can be specifically interpreted as a bonus or any other reward.

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Employers may offer their employees facilities and/or pecuniary benefits that are more favorable to the latter, even if not mentioned in the Employment Act. This is in line with Article 65, paragraphs 3 and 4, of the Labor Code, which states: “3. Any condition contrary to the provisions of this Decree, even before its entry into force, shall be null and void unless it is more favorable to the employee. Any release, conciliation or waiver of any rights hereunder which conflicts with the provisions of this Agreement shall be void.

4. Employers may formulate and implement in their establishments constitutions and programs that are more favorable to employees than those stipulated in this Decree and its implementing regulations. In the event of any conflict between such plans and constitutions and the provisions of this Act, conditions more favorable to the employee shall apply. “

The Employment Act includes provisions for severance payments (gratia) payable to employees after one year of continuous service. This is in line with Article 51, Paragraph 2 of the Labor Law: “Foreign full-time employees who have served continuously for one year or more are entitled to receive severance pay, which is calculated based on the basic salary as follows:

One. 21 working days per year for the first five years of service.

b. 30 working days’ wages for each subsequent year of service. “

Often, the MOHRE form of employment contracts may not include clauses related to severance pay. However, it includes general provisions relating to the applicability of provisions of the Employment Act. So, on this basis, you are entitled to severance pay (grate) as long as you have served your employer continuously for more than one year.

Legal point of view:

Ashish Mehta is the founder and managing partner of Ashish Mehta & Associates. He is qualified to practice in Dubai, UK and India. For more information about his firm, please visit: www.amalawyers.com. Readers can email their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.