Thirty days of entitled leave to recharge is a necessary period recognised by law for employees to rest and rejuvenate. Several questions arise for employees when considering taking leave whether they are unable to take it due to external factors, choose not to take it, or seek clarity on leave during the probationary period. These questions are addressed by the relevant federal laws and cabinet resolutions governing labour relations. Annual leave in the UAE is governed by UAE Federal Decree-Law No. 33 of 2021 Regulating Labour Relations, ensuring employees receive adequate rest or compensation in lieu of unused leave, along with Cabinet Resolution No. 1 of 2022, which further elaborates on the provisions relating to annual leave.

Annual Leave Entitlement

  1. The employees are entitled to 30 days of fully paid annual leave after completing one year of service. If the service has exceeded six months, then they are entitled to two days per month.
  2. Part-Time Employees – Part time employees are entitled to an annual leave based on their working hours as specified in their employment contract. It is calculated proportionally under the executive regulation where the working hours are converted to working days with a minimum entitlement of 5 working days per year.

When Leave Can Be Taken

  1. Employees are expected to take a leave every year instead of pilling it up, yet they can still do that if they wish to do so.
  2. The employer can determine the leave based on the work requirements but that doesn’t mean they have the power to arbitrarily refuse a leave request.
  3. Leave can be granted on a rotational basis to ensure continuous operations.
  4. A one-month prior notification their approval of annual leave should be given to the employee.

Carry Forward of Annual Leave

  1. On the approval of the employer and complying to the company policy unused annual leave may be carried forward to the following year.
  2. A maximum of half of the balance annual leave can be carried forward.

Cash Compensation for Unused Annual Leave

  1. The employees are entitled for full salary during annual leave.
  2. Article 29(9) of the labour law and the Executive Regulation Article 19(2) states that if the employment ends by resignation and termination, they are entitled for cash compensation for all unused leave irrespective of the number of leaves left.
  3. Executive Regulation Article 19(1) states that the employees may agree with the employer to convert into cash instead. It is not an automatic right the employee should have an agreement with the employer.
  4. When the unused leave is paid out the calculation is based on the employee’s basic salary not full salary until the company policy is different.

Annual leave is a statutory right for every employee working in the UAE, designed to ensure that individuals have adequate time to rest and rejuvenate. While employees may carry forward or encash their leave, it is important to remain aware of the limits and conditions imposed by law, particularly regarding employer approval and the calculation of compensation. Employers are also obligated to ensure that employees can avail their leave within reasonable timeframes and are fairly compensated for any unused balance.

At Ayesha Al Dhaheri Advocates and Legal Consultants, we provide expert legal guidance on UAE labour law matters, including employee entitlements, leave policies, and dispute resolution, ensuring clarity and compliance for both employers and employees.