Qatar Law No.(14) of 2004 (Labour Law) governs the terms of employment for the  majority of individuals working in Qatar and establishes their minimum rights and  obligations. These rights include an employee’s entitlement to be paid a sum of money  by their employer on the termination of their employment locally referred to as an “end  of service benefit or gratuity” (EOS). There may be various other termination payments,  such as accrued but untaken holiday, payable to employees when their employment  terminates however, these are beyond the scope of this article.

Who is excluded from the Labour Law? 

The Labour Law excludes the employees of Qatar  Petroleum and its corporate establishments whose  employment is governed by special laws; it also excludes  Government/public employees whose employment is  governed by the provisions of Law No.(8) of 2009 (Human  Resources Law). In addition members of the armed  forces, the Police, employees at sea, casual, domestic and  agricultural employees and dependants are excluded  from the Labour Law. Finally mention should be made of  the Qatar Financial Centre (QFC) and the Qatar Science  and Technology Park both of which each have their own  employment regulations. Where individuals are excluded fro

m the Labour Law their  employment is subject to alternative legal and regulatory  provisions, including the Human Resources Law, which  may or may not include the provisions of a form of EOS.

Who qualifies for EOS?

In addition to any other termination payments, employees  whose employment is subject to the Labour Law are  entitled to receive EOS provided they have completed at  least one year’s continuous service with their employer  when their employment is terminated. 

If an employee has had their employment terminated  lawfully for gross misconduct, (e.g. they have submitted  fraudulent documentation, have caused material financial  loss, etc), they will not qualify for EOS. However, employees  who lawfully terminate their employment without notice  in response to a material breach by their employer (e.g.  physical assault, etc) should be paid EOS in addition to  their other employment termination payments. 

Employees who are entitled to receive a higher payment  under their employer’s retirement or pension scheme than  under their EOS, in most cases, will not be entitled to EOS  in addition to the scheme benefits. Where, however, the  scheme benefits are less generous than EOS, employees  can choose to be paid EOS instead. If so, the employer must  repay any contributions paid by the employee into the  scheme, and/or any contributions paid into the scheme by  the employer, on the employee’s behalf.

If an employee dies when they are working in Qatar and  if they would have qualified for EOS then their employer  is under an obligation to pay EOS to the employee’s heirs  or beneficiaries in addition to any other employment  termination payments which would have been payable to  the deceased employee in the usual way. 

How is EOS calculated?

Employers and employees can agree on the amount of  EOS the employee will be paid on termination, provided  the amount is equal to at least three weeks’ pay of the  employee’s final basic salary, for every full year they have  worked for the employer. Part years are pro-rated. Periods  of valid leave, e.g. sick, maternity or annual leave, are  generally included in the calculation. Periods of voluntary  unpaid leave are generally excluded, but this depends on  company policy.

If the employee’s employment began before 6 January 2005,  EOS for the period to 6 January 2005 should be calculated  in accordance with the terms of the previous Qatar labour  law which had more generous provisions for employees  than those provided by the Labour Law. In addition the  previous labour law permitted the employer and employee to opt out of EOS if the employee was foreign, worked for a  national enterprise and agreed to opt out in writing. Such  an opt out is no longer possible. 

When is EOS payable?

The Labour Law provides for EOS to be paid when  employment is terminated. Recent entrants to Qatar have  started introducing payment policies which provide for  employees to be paid EOS throughout the duration of  their employment in order to ease cash flow by avoiding  material payments having to be made on termination.  Where such policies are implemented it will be important  for employers to ensure that their employees receive their  full EOS entitlement in compliance with the Labour Law. A  recalculation of the EOS should be undertaken and a final  termination payment made to employees to ensure that  full payments are made.