In the application of the provisions of this Resolution, the following words and expressions shall have the meanings ascribed thereto, unless the context requires otherwise:

State: United Arab Emirates.

Ministry: Ministry of Human Resources & Emiratisation.

Authority: Securities & Commodities Authority (SCA).

Central Bank: The Central Bank of the United Arab Emirates.

Decree-Law: Federal Decree-Law No. (33) of 2021 Regulating Labour Relations.

Employer: Every natural or legal person employing one or more Workers in return for a Wage of any type.

Basic Wage: The wage specified in the employment contract, which shall be paid to the Worker in return for his work under the employment contract, on a monthly, weekly, daily, hourly or piece-meal basis, and does not include any other allowances or benefits in kind.

Total Wage: The basic wage, plus the cash allowances and benefits in kind decided for the Worker under the employment contract or this Law, and it may include: The benefits in kind that the Employer shall provide to the Worker or cash equivalent thereof, if they are determined as part of the wage in the employment contract or the Statute of the Establishment, or the allowances to which the Worker is entitled to in return for the effort exerted thereby, or the risks they are exposed to in the performance of their work, or any other reasons. Or the allowances given to meet the high cost of living, or a percentage of sales, or a percentage of the profits paid in return for what the worker markets, produces, or collects.

Alternative Scheme: An optional scheme alternative to the End of Service Gratuity Law in force in accordance with the Decree Law and its executive regulations, under which the employer shall pay a monthly subscription to the Investment Fund. In return, the beneficiary shall, upon the end of their service, receive, dues thereof from the basic subscription amount allocated thereto, along with any investment returns resulting therefrom as an alternative to entitlements thereof from the end of service gratuity, in accordance with the provisions of this resolution.

Investment Fund: Investment fund licensed by the Authority in accordance with the regulations issued thereby in this regard for the purposes of the alternative scheme.

Fund Offering Document: The document that specifies the details and conditions of the offering and all information related thereto and necessary to introduce the product that shall be offered, in accordance with the regulations recognised by the Authority.

Beneficiary: The worker registered in the alternative scheme, who was chosen by the employer to receive their dues and benefits according to the alternative scheme during the employment relationship.

End of Service Gratuity: The remuneration paid by the employer to the worker (beneficiary) upon the end of the specified service thereof in accordance with the provisions of the Decree Law.

Skilled Labour: The worker who works according to the professional levels (from the first to the fifth) and receives a monthly salary of not less than (4,000) four thousand Dirhams or its equivalent, according to the labour classification system in the labour market in the State, approved in accordance with Cabinet Resolution No. (2/2 W) of 2022 regarding updating the labour classification system in the labour market in the State.

Basic Subscription: The financial amount paid by the employer on a monthly basis for the purposes of implementing the alternative scheme, in accordance with the provisions stipulated herein.

Voluntary Subscription: The financial amount that shall be paid from the beneficiary wages on a monthly or annual basis based on desire thereof, in accordance with the provisions of this resolution.

Investment Fund Service Providers: Legal entities licensed by the Authority to provide services to the Investment Fund in accordance with the standards and obligations set forth in the appendix attached hereto, which include:

The objective of this Law is to attain the following:

1. Ensure that workers receive end of service gratuity and protect them from inflation waves, or the employer insolvency or bankruptcy, and provide opportunities to save and develop them and achieve returns on those savings, through an investment system.

2. Enhance the attractiveness and flexibility of the labour market that supports workers by improving the level of services provided thereto.

3. Benefit from opportunities to invest funds in investment instruments for economic activities in the State.

The provisions of this resolution shall apply voluntarily to employers in private sector establishments in the State, including free zones, and workers in those establishments.

Employers wishing to subscribe to the alternative scheme shall submit a subscription application to the Ministry in accordance with the procedures specified by the Ministry in this regard.

The employer opting to subscribe in the alternative scheme shall adhere to the following:

1. Choose one of the licensed investment funds for the purposes of implementing the alternative scheme, through contracting with the Fund Manager;

2. Choose the categories of workers and professional levels thereof that he would like to include in the alternative scheme;

3. Stop working with the current end of service gratuity system for workers who have been chosen to participate in the alternative scheme, provided that the employer shall be committed to calculate the gratuity due to the beneficiary before implementing the alternative scheme in accordance with the provisions of the decree law. The employer shall pay such gratuity upon termination of the work relationship, calculated on the value of the beneficiary basic wage at the time of participation in the alternative scheme;

4. Calculate and pay the basic subscription amount in accordance with the provisions of this resolution without deducting it from the beneficiary wage. Such amounts shall not be refundable to the employer;

5. Provide the investment fund service providers with all documents and information related to the beneficiaries upon request; and

6. The Minister shall issue a resolution specifying the cases in which the employer may subscribe to the alternative scheme.

1.The basic monthly subscription amount shall be calculated as follows:

1. The beneficiary may contribute a percentage of the total wage or contribute an additional amount (monthly or lump sum) in addition to the basic subscription amount, through any of the following two means:

1. The fund manager shall provide various investment options and make them available to the beneficiaries, provided that the investment options shall include the following:

1. Taking into account the provisions of Clause (3) of this Article, the beneficiary shall be entitled to all basic subscription amounts paid by the employer in the alternative scheme and any returns resulting therefrom during the subscription period, within a period not exceeding (14) fourteen days from the date of termination of the employment relationship with the employer or the successors of the beneficiary within a period not exceeding (10) ten working days from the date of death thereof.

2. The beneficiary or successors thereof may notify the Fund Manager in writing within the periods referred to in Clause (1) of this Article of their desire for the Fund to continue investing the funds owed thereto. The beneficiary may also withdraw the funds at any time without any restriction.

3. The employer may demand deduction of any amounts legally due thereto from the worker entitlements in the alternative scheme upon termination of the employment relationship between both parties, after the approval of the Ministry or in implementation of a judicial ruling in accordance with the relevant legislation in force.

1. The alternative scheme shall be considered a voluntary system for employers, provided that employers shall adhere to all provisions stipulated herein upon subscription to the alternative scheme.

2. The system shall be mandatory for workers who have been selected by their employer to participate in the alternative scheme.

3. The Authority shall be responsible for granting licences to Investment Fund Service Providers, in accordance with the standards and obligations approved thereby to carry out activities thereof.

4. The authorities regulating the activities of financial free zones within the State shall develop and approve the stipulations of the alternative scheme pertaining to the End of Service Gratuity Law, which applies to entities under their jurisdiction, in line with the prescribed criteria. Shall they intend to extend this service to entities outside jurisdiction thereof, they shall secure the approval of both the Ministry and the Authority.

5. All anti-money laundering provisions, procedures and requirements shall apply to the activities of the alternative scheme pertaining to the End of Service Gratuity Law.

6. The fund manager shall be responsible for taking the necessary measures to secure entitlements of the beneficiaries, in accordance with the mechanisms specified by the Authority.

7. Under any circumstances, basic subscription amount and the profits and returns generated therefrom in the alternative scheme may not be withdrawn before the end of the work relationship between the employer and the beneficiary. However, the employer shall have the right to recover the basic subscription amounts only if the work relationship ends before the lapse of one year from beginning thereof.

8. The basic subscription amounts paid shall not be included in a judicial enforcement, seizure, liquidation or bankruptcy procedures imposed on the employer.

9. In the event that the beneficiary moves from the current employer to another new employer, the new employer may replace the previous one in completing the payment of the basic subscriptions in the alternative scheme, in accordance with the provisions of this resolution.

10. The employer may change the fund manager and transfer all subscription amounts and returns to an alternative investment fund, based on reasons related to the level of service performance and what supports the interests of the beneficiaries, after obtaining the approval of the Ministry and the Authority. Neither the employers nor the beneficiaries shall not bear any cost for the transfers.

11. The Fund Manager may voluntarily accept any other subscriptions from the following categories in accordance with the provisions contained in the Fund offering document and any other controls established by the Ministry in coordination with the Authority and the concerned authorities:

1. The Ministry and the Authority may take all necessary measures for the purposes of monitoring, supervising and inspecting the alternative scheme in accordance with the legislation in force in this regard.

2. Both the Ministry and the Authority may establish the controls, restrictions and procedures necessary to implement the provisions of this resolution.

3. The Ministry shall be responsible for receiving labour complaints related to the alternative scheme in accordance with the procedures determined thereby in this regard. It shall also be authorised to investigate any violations resulting from the inspection or included in the complaints received thereby.

4. Financial free zone authorities shall be responsible for supervising, controlling, and settling complaints related to the alternative scheme for the End of Service Gratuity Law applied under authority and scope of jurisdiction thereof.

5. The Authority shall be competent with receiving complaints regarding the performance of investment fund service providers in accordance with the relevant controls issued thereby.

The following procedures shall be applied in the event that the employer fails to pay the basic subscription on time:

1. The fund manager shall, within thirty (30) days from the date of payment, send a written warning to the employer of the necessity of paying the basic subscription within a period not exceeding five (5) working days from the date of receiving the warning.

2. In the event that the basic subscription is not paid within (15) fifteen days from the date of sending the warning, the fund manager shall notify the Ministry.

3. After two (2) months have passed from the date in which the employer failed to pay, the Ministry shall stop issuing new work permits to the employer until all subscription amounts due therefrom are paid, or any other administrative measures shall be taken in accordance with its applicable regulations.

4. After (4) four months have passed from the date of failure to pay the subscription amounts, the Ministry shall impose an administrative fine on the employer in the amount of (1,000) thousand Dirhams per month for each beneficiary.

1. The employer shall have the right to withdraw from the alternative scheme based on approval of the Ministry, taking into account the following conditions:

The Ministry and the Authority shall issue the necessary resolutions to implement the provisions of this resolution, each within the limits of its jurisdiction.

Any provision that violates or contradicts the provisions of this Resolution shall be repealed.

This Resolution shall be published in the Official Gazette and shall enter into force as of the day following the date of its publication.