New UAE labour law decree: Can you encash unused annual leave?
New decree explains how many unused annual leaves you can carry forward to the next year.
Dubai: Can an employee who has not used their annual leave ask for encashment of unused annual leaves? There are certain conditions that need to be met, as outlined in the new UAE Labour Law and subsequent decrees issued by the Ministry of Human Resources and Emiratisation (MOHRE) for an employee to avail of such an option.
Article 29 (8) of the new UAE Labour Law - Federal Decree Law No. 33 of 2021 - states that employees with accrued annual leaves can request to be "paid in lieu of leave according to the Establishment bylaws and as specified by the Executive Regulations of this Decree-Law."
Here is a detailed look at what Article 29 states in clauses 8 and 9:
A worker shall be entitled to be paid for his days of leave if he leaves work before the use thereof, irrespective of the length thereof, for the period for which he did not utilise his leave. The worker shall be entitled to the leave pay for the fractions of the year in proportion to the period of service, and the same is calculated on the basis of the basic wage.
Further to this law, MOHRE also issued Cabinet Resolution No. (1) Of 2022, which states that a "worker may carry forward not more than half of the annual leave to the following year, or he may agree with the employer to receive a cash allowance thereof, according to the wage he receives at the time of his entitlement to the leave."
So, if your company's policies provide for such an option, or if you have an agreement with your employer on receiving cash in lieu of accrued annual leave, you can benefit from such a step.
Here is a detailed look at what the Cabinet Resolution stipulates in this regard:
1. The worker may carry forward not more than half of the annual leave to the following year, or he may agree with the employer to receive a cash allowance thereof, according to the wage he receives at the time of his entitlement to the leave.
2. If the worker’s service ends, he shall be paid a cash allowance for the balance of his legally due annual leave, according to the basic wage.