Dubai: If you are unable to use up all your annual leaves at work, can you encash it? And if so, how will it be calculated? The UAE Labour Law stipulates how leaves and working hours are calculated in detail, as well as how employees should be paid for in case of unused annual leaves.
According to the UAE Labour Law, if a worker is requested to work during his total annual leave or a part of it and the leave is not carried forward to the next year, the employer must pay him his regular salary, in addition to a leave allowance, which is equal to his basic wage only.
In all cases, annual leaves may not be forwarded for more than once within two consecutive years. So, if your annual leaves are getting accrued, you would need to speak with your manager to use them, as the UAE Labour Law provides the employer the prerogative to determine the duration of the annual leave and when it can be taken. An employer can defer annual leave only once in two consecutive years and at the same time pay the employee the annual leave wages or pay.
Duration of the annual leave
Employees are entitled to an annual leave of two days per month, if they have completed six months of service, but not one year. If they have completed one year of service, they are entitled to 30 days of service.
The calculation of the duration of annual leave will include official holidays specified by law or by agreement and any other leaves caused by sickness if they fall within the annual leave.
How is annual leave salary calculated?
For the annual leave, the worker must receive his basic salary in addition to a housing allowance if such an allowance is stipulated in the contract. Also, the employer must pay the worker’s salary for annual leave before it is taken. Unused annual leaves also need to be paid for in case of resignation or termination of the employee’s contract.
Article 79 of the UAE Labour Law 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 leave 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.”