Can UAE Employers Deduct Damages from End-of-Service Benefits? What the Law Says About Equipment Liability and Employee Rights

An employee’s end-of-service benefits are often seen as a guaranteed financial right at the conclusion of employment. However, disputes can arise when employers attempt to deduct amounts citing alleged damage to company property. Under the UAE’s updated labour framework, such deductions are not entirely prohibited — but they are tightly regulated and subject to clear legal conditions.


The governing provision is Article 51(7) of Federal Decree-Law No. 31 of 2021, which allows employers to deduct from an employee’s end-of-service benefits any amounts that are legally payable, whether under the law itself or pursuant to a court judgment. Crucially, this right is not absolute. It must be exercised strictly in accordance with the procedures and safeguards outlined in the law and its implementing regulations.

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