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What are an employee's annual leave entitlements?
For every year of service, an employee is entitled to annual leave of
not less than the following:
1. Two days leave for every month if his service is more than six
months and less than one year.
2. A minimum of thirty days annually, if his service exceeds one year.
At the end of his service the employee is entitled to annual leave for
the fraction of the last year he spent in service.
Annual leave is usually calculated on the basis of a calendar month
rather than by working days. If an employee however fails to report
back to work after the expiry of his leave period, his remuneration
will automatically be forfeited for the days he is absent.
What would be payable to the employee during his annual leave?
An employee is paid his basic wage plus the housing allowance, if
applicable, and any other allowances which he receives in the normal
working month exclusive of any bonuses received.
Who determines when the annual leave commences and its duration?
The employer has the right to determine when an employee is allowed to
take his annual leave and whether (if required) he is entitled to
divide the leave into two parts.
If however, work circumstances require keeping the employee at work
during the whole or part of his annual leave and the leave has not
been carried over for the following year, the employer should pay the
employee his wage in addition to a leave allowance for the days he
worked equal to his basic wage.
In all cases, no employee should be required to work during his annual
leave more than once during two consecutive years.
In other words, the employer may only defer the annual leave once in
two consecutive years and at the same time pay the employee the annual
When should annual leave wages be paid?
The employee should be paid his full wage before taking his annual
leave, plus the wage of the leave days he has accrued.
Is the employee entitled to payment in lieu of leave if his
services are terminated?
The employee is entitled to payment of his wages for the annual leave
period not taken if his employment is terminated, or he resigns after
serving the period of notice determined by law. Such payment is
calculated on the basic wage received at the time the leave was due
including any housing or accommodation allowance where applicable.
Some employers also include transportation allowance in the
calculation, although this is discretionary rather than compulsory.
Nevertheless, according to judgments delivered on the matter, an
employee may only claim remuneration for the annual leave not taken
for the last two years of employment at the rate of the wages paid
during that time. Any leave days not taken prior to that period are
therefore time barred and the employee is precluded from claiming
remuneration against them (providing the employer relies on this time
bar provision in the event of a claim).
I have been working in a company in the food industry for four
years. I am eligible for my annual leave now. Last week, I applied for
the leave, but my application was rejected by the office, saying that
there are not enough staff at the moment. I would like to know if my
company has the right to deny my annual leave.
Annual leave cannot be denied for two years
According to Article 78 of the federal labour law, if the work
requires your stay in the country and prevents you from taking your
leave, and if your leave is not carried forward to the next year, the
employer has to pay you remuneration plus a leave allowance for the
days you worked at a rate equal to your basic wages. Furthermore, this
exception is not allowed more than once in two successive years.
Article 75 of the UAE Labour Law governs the annual leave of an
employee. An employee is not entitled to an annual leave if his
employment period is less than six months. However, if his employment
period is more than six months but less than a year, he shall be
entitled to an annual leave of not less than two days for each month.
However, if the employment period is more than a year, he is entitled
to 30 days annual leave. Therefore, the duration of annual leave shall
not be decreased as the right to annual leave is granted by the law.
Article 75 states:
The employee must be granted an annual leave during each year of
service which may not be less than:
1. Two days per month with respect to any employee with more than six
months and less than one year of service.
2. Thirty days per annum with respect to any employee whose period of
service exceeds one year. In the event of termination of an employee's
service, he shall be entitled to an annual leave depending on the
number of months completed in the last year of service.
The employer has the right to specify the beginning of the annual
leave and he can divide the leave into two parts, when necessary, in
order to ensure smooth operation of the organisation/company. Article
76 states: The employer, at his discretion, may determine the date for
the commencement of annual leave and, when necessary, he may decide to
divide the leave in two parts at the most, except in cases of
juveniles, where vacation may not be divided in parts.
In such an event, the leave may be forwarded to the next year, but it
may not be suspended for more than two years and the employee will be
entitled to sixty days annual leave in the next year if not paid in
cash in lieu of the leave for his working days. Article 78 states:
The employee shall receive his basic pay in addition to housing
allowance, if any, for the annual leave days. However, if the
exigencies of work necessitate that the employee works during his
annual leave in whole or in part, and the period of leave during which
he has worked has not been carried forward to the next year, the
employer ought to pay him his wage in addition to cash in lieu of the
leave for his working days based on his basic pay.
It shall be unlawful in any circumstances to employ a worker during
his annual leave more than once in two successive years.
I work as a school nurse here. Our employer said that during
vacation, we will not receive any salary and that is for July and
August. They will also not shoulder our accommodation charges. I am
very worried because that is not what we agreed on or was written in
the employment contract. They made us sign a waiver that we will have
our two-month vacation without pay. Please advise.
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Salary must not be deducted during vacation
As a general principle of law, a binding contract cannot be changed
unilaterally. Article 267 of the UAE Civil Code states: 'A binding
contract cannot be changed unilaterally except with mutual consent of
the parties or by an order of the court or by law'. Therefore, your
employer does not have any legal right to deduct your salary or
shoulder your accommodation charges if it is provided in your
employment contract. Since you have signed the amended waiver, thus,
it is binding upon you unless you prove that you have been forced to
sign this waiver (KT).
Leave salary is
meant to include the basic salary and housing allowance. This is in
accordance with the provisions of Article 78 of the Labour Law which
Every worker shall be entitled to his basic wage and the housing
allowance, if applicable in respect of his days of annual leave where
the circumstances of the work make it necessary for a worker to work
during all or part of his annual leave and the days of leave on which
he works are not carried forward to the following year, the employer
shall pay him his remuneration, plus a leave allowance in respect of
the days worked at a rate equal to his basic wage.
It shall be unlawful in any circumstances to employ a worker during
his annual leave more than once in two successive years.
Leave salaries are accrued and payable even if an employee leaves his
employment or is dismissed by the employer, and such leave salary
shall be payable in accordance with the employee's salary as of the
date when his leave was due. This is in accordance with Article 79 of
the Labour Law which states:
A worker who is dismissed or who leaves his job after the period of
notice prescribed by law shall be paid for any accrued annual leave
days. Such payment shall be calculated on the basis of the worker's
wage as on the date when the leave became due.
Unused leave should be compensated
Q: One of my employees resigned before completing one year at
our company. He recently travelled to his country without resigning
and wanted to avail 14 of his 24 days' annual leaves (the number for
employees with less than one year's service).
A month later, his mother died, and he considered himself on emergency
leave. After 67 days away, he finally submitted his resignation from
his home country.
Do I need to pay him legally? I believe there is no gratuity or leave
balance since he has already availed his leave. He has not served his
notice period, too. Is he eligible for emergency leave before
completing one year?
A: Pursuant to your questions, you should pay the said employee
for the 14 days of annual leave and for the balance of annual leave
not availed by the employee in accordance with Article 79 of the
Federal Law No. 8 of 1980 regulating Employment Relations in UAE (the
"Labour Law") which states: "Where a worker is dismissed or leaves his
job after the period of notice prescribed by law, he shall be entitled
to remuneration in respect of any days of annual leaves not taken.
Such remuneration shall be calculated on the basis of the remuneration
that he earned on the date on which the leave became due." Further,
Article 75 of the Labour Law reads: "Every worker shall, within each
year of service, be granted a period of annual leave of not less than:
(a) two a month, where the worker's period of service is more than six
months but less than one year;
(b) 30 days a year, where the worker's period of service is more than
one year. Where a worker's service is terminated, he shall be entitled
to annual leave in respect of fractions of the last year."
The Labour Law is silent about emergency leave and therefore the
employee may not be eligible for emergency leave before or after
completion of one year of employment. However, depending on the policy
of the employer, the employer may treat the emergency leave availed by
the employee as an extension of his annual leave.
In this particular instance, due to the demise of the mother of the
employee the employer may at discretion grant emergency leave to an
employee on humanitarian grounds. The employee is not eligible for
severance pay as he has not completed one year of employment.
We assume that the said employee's work permit and visa are cancelled.
In this scenario you may not be in a position to claim any
compensation from the employee. In case his work permit is not
cancelled, you may be able to claim compensation from the employee on
the grounds that he has not served the 'notice period' in accordance
to Article 119 of the Labour Law which states: "Where an employer or a
worker fails to give the party notice of the termination of the
contract or reduces the period of notice, the party obliged to give
notice shall pay the other party compensation, called "compensation in
lieu of notice", even where no prejudice has been sustained by the
other party as a result of such failure or reduction.
The said compensation shall be equal to the worker's remuneration in
respect of the entire period of notice or the time by which it was
reduced. Compensation in lieu of notice shall be calculated on the
basis of the remuneration last received, in the case of worker
remunerated on a monthly, weekly, daily or hourly basis or in the case
of a worker remunerated at piece rates, on the basis of the average
daily remuneration referred to in article 57 of this Law.
NOTE: Hamriyah Free Zone, Sharjah, matters pertaining to
employment is governed by the provisions of Federal Law No. 8 of 1980,
relating to Regulation of Labour Relations (the Labour Law).
Ministry of Labour, Qusai, Dubai
Timing: Saturday to Thursday
7:30am to 7:00pm
Call Centre: 800 665
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