UAE gratuity: resignation versus termination after 2021

Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), resignation and termination pay the same end-of-service gratuity. An employee who resigns earns the full accrued gratuity on the standard formula, just as one who is terminated does.

What changed

The previous law reduced gratuity for employees who resigned under unlimited-term contracts before completing five years of service. The 2021 law, effective February 2022, abolished unlimited-term contracts and moved everyone to fixed-term contracts, and the resignation reductions tied to the old framework went with it.

The practical effect: the reason an employee leaves no longer changes the gratuity number in the UAE. Any policy, calculator, or framework that still applies a resignation discount is describing the pre-2022 position and is wrong for the current law.

Where it still matters

This is a UAE-specific simplification. Saudi Arabia still reduces its end-of-service award on resignation before ten years of service, so the resignation-versus-termination distinction remains a live number there. For a comp lead managing both markets, the rule is: in the UAE, model one gratuity figure regardless of exit mode; in Saudi, model the resignation scale.

What this means for offboarding

Because exit mode does not change the UAE figure, gratuity is predictable at any point: it is the accrued amount on the standard formula, full stop. The variables worth tracking at offboarding are notice served, accrued leave, and any contractual enhancements, not a resignation penalty that no longer exists.