Ask the Law: Is a worker who is paid on commission basis entitled to annual leave with pay?

Annual leave for worker paid on commission basis

Question: I have been working in a private company for a year, with commission only. My question is, am I legally entitled to take annual leave with pay? In the event of resignation, how will the end-of-service benefits be calculated, especially since the work contract does not mention basic salary? Please advise.

Answer: Article 23 of the UAE’s new Labour Law states: The daily wage of workers who receive their wages on piecemeal basis shall be calculated according to the average amount the worker received for the actual working days during the six months preceding the request or claim, regarding any issue related to the wage.

You have the right to take paid annual leave, sick leave and also gratuity in case if your employment type is full time and even if your work is considered on a piecemeal basis.

Your rights should be calculated according to Article 23 mentioned above, according to the average amount the worker received for the actual working days over the six preceding months from the time when the request or claim regarding any issue related to calculation of basic salary is made. It has been decided in the Higher Court of Dubai: ‘The wage is everything that falls into the responsibility of the worker, whatever its kind, in return for his or her performance of the agreed-upon work — regardless of the method of its determination or the designation given to him or her, so that what is given to the worker in this context is a wage or part of the wage, and the commission on this basis is considered a wage and is included in the basic wage of the worker, whenever the employer abides by it in the work contract and its average is taken within a reasonable period in order to calculate the basic wage.’ (Cassation No 149/2017. Labour.)

Article (30) of Cabinet Resolution No (1) of 2022 differentiates between the ‘End-of-Service Benefits for Workers in other Types of Employment’, rather than those on a full-time basis. It states: ‘Subject to the provisions of Article (52) of the Decree-Law, the end-of-service benefits due to workers working in part-time or job-sharing types and not on a full-time basis shall be calculated pursuant with the following mechanism:

1. The number of working hours set out in the employment contract per year divided by the number of working hours in the full-time contract per year multiplied by 100, is equal to the percentage on which the end-of-service benefit should be calculated. Then, this percentage should be multiplied by the value of the end-of-service benefit due for the full-time employment contract.

2. The end-of-service benefit shall not apply in case of temporary employment if its duration is less than one year.

Moreover, Article (18) of the same Cabinet Resolution No (1) of 2022 regarding Annual Leave for Part-time Workers states: ‘Subject to the provisions of Clause (2) of Article (29) of the Decree-Law, a part-time worker shall be entitled to an annual leave according to the actual working hours he or she spends with the employer. The duration of the annual leave shall be determined on the basis of the total working hours after converting them into working days, divided by the number of working days in the year, multiplied by the legally prescribed leaves, with a minimum of five working days per year for annual leave, and a fraction of a day considered as a full day in calculating the leave entitlements.