End-of-Service Gratuity When an Employee Dies in the UAE

What Should Happen

When an employee dies in the UAE, the employer is legally required to calculate the end-of-service gratuity (ESG), outstanding salary, accrued leave pay, and any flight allowances owed to the deceased worker. For OFWs who spent years building their gratuity — the equivalent of a terminal benefit in Philippine labor law — this sum can represent tens of thousands of dirhams that the family urgently needs for repatriation costs and survival expenses.

The problem is how the money reaches the family.

Why the Family Cannot Receive It Directly

Under UAE labor and estate law, the employer is prohibited from paying these amounts directly to the family. Instead, the employer must deposit the calculated sum into the deceased employee's bank account — the same account that is now frozen because of the death notification.

This creates an immediate crisis. The gratuity goes into a frozen account. The frozen account can only be released by a UAE court probate order. The probate process takes months (3–6 months with a registered will, 12–24 months without one). Meanwhile, the surviving family — often a dependent spouse in the UAE whose own visa is now at risk — has no access to the funds they need most urgently.

The Employer's Obligations

UAE employers must, upon notification of an employee's death:

1. Calculate the full end-of-service gratuity based on the employee's continuous service period and last drawn basic salary
2. Calculate outstanding salary for any unpaid period up to the date of death
3. Calculate accrued but unused annual leave at the daily rate
4. Prepare a final settlement statement itemizing all amounts owed
5. Deposit the total into the deceased's bank account (or, if no bank account existed, hold the funds pending court instruction)
6. Cancel the employee's labor file with MOHRE
7. Initiate visa cancellation through GDRFA or ICP
8. Coordinate repatriation assistance — many employment contracts include a clause obligating the employer to arrange and fund the repatriation of the worker's remains and personal effects

Any proposed deductions should be itemized and checked against the employment contract and applicable UAE labor rules; if the family disputes them, the representative can raise the issue with MOHRE.

What the Family Should Do

Document everything immediately. Request a copy of the employment contract, the final settlement calculation, and written confirmation that the gratuity has been deposited. The employer should provide this proactively, but families often need to ask — particularly if the employer is a smaller company without a dedicated HR department.

Do not accept informal cash settlements. Some employers offer to hand over the gratuity in cash directly to a family member or colleague. While this feels faster, it creates no legal record of the payment and can complicate the probate filing later. The court needs a traceable deposit.

File the labor complaint early if needed. If the employer refuses to calculate the gratuity, delays the deposit, or makes unauthorized deductions, the family's representative can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE). This does not require a court case to initiate — MOHRE mediates labor disputes before they escalate to court.

Check the compulsory insurance. Under RA 8042/10022, the OFW's recruiting agency is required to maintain a compulsory insurance policy that pays a natural death benefit of USD 10,000 or accidental death benefit of USD 15,000 — separate from the UAE gratuity. Ask the insurer which beneficiary and claim documents it requires.

The Filipino Dies in the UAE Family Guide includes the employer obligation checklist, a template for requesting the final settlement statement, and instructions for filing a MOHRE complaint if the employer is not cooperating.