Another essential purpose of gratuity is to reward employees for their years of contribution and loyalty to a company. It acknowledges that the longer an employee serves, the more value they add through skills, experience, and productivity.
Recognition of Service: The UAE Labour Law directly ties gratuity to length of service — the more years you work, the higher your gratuity entitlement. This reflects recognition and appreciation of sustained effort.
Encourages Retention: Knowing that longer service leads to a higher payout, employees are motivated to stay longer with the same employer, reducing turnover from
Gratuity calculation.
Promotes Mutual Trust: Employers who honour gratuity obligations build trust and goodwill. It’s seen as a mark of respect and integrity in business practices.
Essentially, gratuity serves as both a reward and an incentive, strengthening long-term employment relationships.
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