The Iraqi Federal Court of Cassation has confirmed that an employee’s voluntary resignation does not, by itself, eliminate the right to end-of-service gratuity unless an express legal provision provides otherwise.
Background
An employee worked for a private company for an extended period and later resigned. She commenced proceedings seeking payment of her end-of-service gratuity, but the Labour Court dismissed the claim because the relationship had ended through resignation rather than arbitrary dismissal.
Court’s Findings
The Federal Court of Cassation rejected that interpretation. Entitlement to end-of-service gratuity is not limited to cases involving arbitrary dismissal, and resignation was not included among the statutory circumstances in which an employee loses the entitlement.
A court cannot create an additional exclusion or interpret existing exclusions more broadly than the wording of the law permits. The claim should have proceeded so that the entitlement could be determined by reference to service, remuneration and evidence.
Implications for Employers
Employers should not apply a general policy stating that employees who resign are ineligible for end-of-service gratuity. Final settlements should address the reason for termination, recognised service, remuneration, amounts previously paid and accrued entitlements.
Resignation and settlement documents should clearly identify payments without relying on broad waivers that may not be enforceable.
Conclusion
The decision distinguishes between the event ending the employment relationship and the financial rights arising upon termination. Resignation ends the contract, but it does not automatically extinguish benefits granted by law.