Annual leave for Employees as per UAE Labour Law
Most of us look forward to the annual leave in UAE. This is the time for us to relax and come back energized. However, not many of us are able to understand what are the laws governing annual leave in UAE as per UAE Labour Law. If you are an employee or employer, it is better to understand the laws surrounding Annual Leave. Due to the recent Covid19 situation, there is a slight change in the annual leave.
If you are asking yourself following questions, you will find answers in this post:
- Are weekends included in annual leave UAE?
- How is annual leave calculated?
- Can annual leave be paid out?
- Allowance during annual leave.
- Leave salary on resignation in UAE
- Leave salary calculation
There are various types of Leaves that an employee is entitled to:
- Annual Leave;
- Sick Leave;
- Maternity Leave (only for women!)
- Paternity Leave / Parental Leave (updated 2020)
In this post I will cover Annual Leave.
Annual Leave is a basic right of every employee guaranteed by the UAE Labour Law. Full-time employees working in the UAE are entitled to leave and holidays as per laws in the country, which broadly include annual or recreation leave, sick leave and maternity leave.
What are the mandatory leaves as per UAE Labour Law?
Mandatory leaves in UAE: As per Section- 2 Article (74), every employee is entitled to an official leave with full pay on the following occasion:
- Hijri New Year’s Day – one day
- Gregorian New Year’s Day- one day
- Eid Al Fitr (end of Ramadan)- two days
- Eid Al Ada and Waqfa – three days
- Prophet Mohammed’s Birthday- one day
- Isra and Al Mi’raj- one day
- Martyr’s Day – one day
- National Day – one day
Note: Every company in UAE must adhere to the above official leaves. If the employees do work on these days, overtime must be paid to these employees.
No of days for Eid Al Fitr, Eid Al Ada and National day may vary according to the announcement from the UAE Cabinet .
In order to balance between public and private sector the UAE Cabinet granted equal leaves to both the sectors:
The below are the list of public holidays for the years 2021 and 2022:
- Gregorian New Year: 1 January
- Eid Al Fitr: From 29 Ramadan to 3 Shawwal* (4 days)
- Arafah day and Eid Al Adha (Feast of Sacrifice): From 9 to 12 Dhu al Hijjah* (4 days)
- Hijri New Year (Islamic New Year): 1 Muharram – 12 August in 2021 and on 30 July in 2022
- Prophet Mohammed’s birthday: 21 October in 2021 and on 8 October in 2022
- Commemoration Day: 1 December (previously known as Martyr’s Day and was observed on 30 November)
- National Day: 2 and 3 December (2 days).
*Note: Islamic holidays are determined according to moon sighting.
Below are the various Articles in UAE Labour Law which mention and explain about Annual Leave:
How many days is annual leave in UAE?
As per Article (75)- Each employee is entitled for annual leave after completing each year of service as mentioned below:
- Two days leave for every month if his service is more than six months and less than a year.
- 30 days annually if his service exceeds one year. At the end of the service the employee is entitled to an annual leave for the fraction of the last year he spent in 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.
Note: UAE Labour Law mentions about Calendar days leave in this Article.
Who decides annual leaves of employees?
As per the Article (76)- The employer may at his discretion determine the date for commencement of annual leaves 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.
The employer can also keep the employee from getting whole or part of the annual leave based on work requirements. However, in this case, if the annual leave has not been carried over for the following year, then the employer must pay the employee their wage in addition to a leave allowance for the day they worked – which is equal to their basic wage.
Note: As an employee, you could decide when your annual leave starts. However, note that annual leaves are allowed after completion of 1 year at most companies. You could divide your Annual leave into 2 parts at most.
What if you fall sick during annual leave?
As per the Article (77)– The calculation of duration of annual leave shall include holidays specified by law or by agreement, or by any other day because of sickness if they fall within the leave and shall be deemed to be part thereof.
Note: If any official holidays or sickness occurs during the Annual Leave, then they are treated as part of Annual Leave.
Is salary paid in full during annual leave?
As per Article (78)- An employee shall be paid his basic wage plus the housing allowance, if applicable, and any other allowances which he receives in the normal working month.
If however, work circumstances require keeping the employee during whole or part of his annual leave and the leave has not been carried over for the following year, then the employer shall pay him his wage in addition to a leave allowance for the day he worked equal to his basic wage.
Note: Salary during Annual leave will include Basic salary and Housing allowance. Other allowances are also to be paid.
What about annual leaves not utilised? Do I get paid for them? How to calculate unused annual leave payment?
As per the Article 79- An employee is entitled to receive cash in lieu of annual leaves not availed by him, if he was dismissed or if he left the service , after the period of notice stipulated by law. Cash in lieu is calculated on the basis of pay received by the employee at the time of maturity of such leave.
In other words, the employee is entitled to payment for the annual leave period not taken if the employment is terminated either by way of resignation or termination. Such payment is calculated on the basis of the basic wage received at the time the leave was due.
Accrued leave pay is based on only basic pay it doesn’t includes housing, transport or other allowances.
When should I receive my annual leave salary?
As per the Article (80)– Annual leave salary shall be paid to the employee before taking his annual leave, the employee shall be paid his full wage, plus the wage of his leave days he deserves according to the provision of this law.
What if you have to work during annual leaves?
As per the ARTICLE (81)
If exigencies of work necessitate that the employee work on holidays or rest days against which he receives full or partial pay he shall be compensated in lieu thereof with increase in pay by 50% of his wage, but if he has not been compensated for the same with a leave, the employer shall pay him an increase to his basic wage equivalent to 150% of the days of work.
If the 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.
What if you fall sick during annual leave?
As per the ARTICLE (82):
If the employee falls sick for reasons other than labour injury he must report his illness within a period of two days at most and the employer must take necessary measures having him medically checked up to ascertain illness.
As per the ARTICLE (83):
1. During the probationary period, the employee is not entitled to any paid sick leave;
2. If the employee spends over three months after completion of the probationary period, in the continuous service of employer, and falls sick during this period, he becomes entitled to a sick leave not more than 90 days either continuous or intermittent per each year or service, computed as follows:-
A. The first fifteen days with full pay.
B. The next thirty days, with half pay.
C. The subsequent period, without pay.
As per the ARTICLE (84)
Pay during sick leave shall not be made if sickness resulted from mis-behaviour of the employee such as consumption of alcohol or narcotics.
As per the ARTICLE (85)
The employer may terminate the services of an employee who fails to resume his duties at the end of such leave as stipulated in Article (82), (83) and (84) hereof, and in such case the employee shall be entitled to his gratuity in accordance with the provisions of this Law.
As per the ARTICLE (86)
If an employee resigns from service because of illness before the lapse of the first 45 days of the sick leave and the Government Medical Officer or the physician appointed by the employer justifies the causes of resignation, the employer must pay to the employee his remuneration due for the period remaining from the first 45 days referred to above.
As per the ARTICLE (87)
A special leave without pay may be granted for the performance of pilgrimage to the employee once through-out his service and shall not be counted among other leaves and may not exceed 30 days.
Note: This is applicable for Muslim employees once during their tenure at a company.
As per the ARTICLE (88)
During the annual leave or sick leave provided for here under, the employee may not work for another Employer; however, if the employer has established that the employee has done this, he shall have the right to terminate the service of employee without notice, and to deprive him of the leave pay due to him.
As per the ARTICLE (89)
Subject to the provisions herein contained, every employee who does not report to duty immediately after expiry of his vacation, he shall be deprived of his pay for the period of absence commencing from the day following to the date on which the leave has expired.
Note: If you delay rejoining your company after the Annual Leave, you will not be entitled for any pay for the days you are absent.
As per the ARTICLE (90)
Without prejudice to cases where the employer has the right to dismiss the employee without notice or gratuity as prescribed herein, the employer may not dismiss an employee or serve him with a notice of dismissal during his leave as is provided for in this Section.
Note: Companies have no right to dismiss an employee during their leave period.
I am sure these Articles in the UAE Labour Law provide you a detailed view of Leaves, Annual Leaves and your rights as an employee.
An employee cannot work for another company during the annual leave, if you do so an employer has the right to terminate your service without notice and withdraw him of the leave pay due to him
Every employee must report to work upon completion of annual leave. Upon failure to report to duty, the employer has the right to withdraw of his pay for the period of absence commencing from the day following to the date on which the leave has expired.
Except under Article 120 of the Act, the UAE Labour Law does not allow an employer to dismiss or issue termination warnings to employees when they are on annual leave.
Annual Leave ticket Law in UAE Labour Law:
Air ticket policy is very flexible in nature. It is a benefit in kind not in cash so it shouldn’t be en cashed. Annual Air ticket procedure is related to company policy and practice and it is not covered under UAE Labour Law. Note, providing annual air ticket is not required as per UAE Labour Law. This is an added bonus for employees if the company provides annual air ticket.
Are Weekends included in the Annual leave in UAE?
This depends on your company’s calculation of leaves. Every employee is provided with 2 working days per month as leaves. So annually this becomes 24 days. However, some companies mention that annual leave is 30 calendar days. In such cases, when calculating leaves, weekends will be included.
Some companies calculate annual leave with 1.83 working days per month as leaves, so annually this becomes 22 working days without considering weekends.
Are official holidays excluded from the calculation of annual leave?
No. The calculation of the annual leave period will include official holidays specified by law or by agreement, or leave because of sickness, that fall within the same period of annual leave.
However it is depends on company’s policy how the leaves have been calculated whether it is calendar days or working days.
Annual Leave During Probation Period in UAE:
During the probation period you are not entitled for any annual leave and it is entirely at the discretion of the management.
Annual Leave During Covid-19 Situation
COVID19 Precautionary Measures for Annual Leave / Unpaid Leave
Most of the companies are facing unforeseen and unexpected business challenges due to the Covid 19 pandemic. At the same time ensuring the health and safety of their workforce adhering to the guidance provided by the UAE Ministry of Human Resources and Emiratization (the Ministry) on Covid 19.
The Ministry of Human Resources and Emiratization’s decision regarding employment stability in private sector establishments mentioned 5 topics:
- Implementing the “remote” work system.
- Granting the employee a paid leave.
- Granting the employee unpaid leave (need employee consent)
- Reducing the employee’s wages temporarily (need employee consent)
- Permanent Salary reduction (need employee consent)
- Can the Employer ask employees to consume annual / paid/ unpaid leaves balances during the COVID-19 pandemic?
Yes, Employer have the legal right to ask their employees to consume annual /paid leave balances (but not unpaid leave) only in the event remote work system does not match the nature of the company’s work.
This is one of the precautionary measures as per the Ministerial Resolution no 279 of 2020 Article (2) on Employment Stability in Private Sector during the Period of Application of Precautionary Measures to Curb the Spread of Covid19.
In this case, employers are well within their rights to ask employees to consume their annual leave / paid leave balances without seeking the employee’s consent.
It is also mentioned in the UAE Labour Law that an employer can defer annual leave only once in two consecutive years and at the same time pay the employee the annual leave salary.
However, in the event of employee does not have any available balance of annual leave, employer may request the employees to go for unpaid leave which must be agreed by both employer and employees with a permanent amendment of being necessarily registered with MOHRE / MOL.
Employers in the UAE cannot force employees to take unpaid leave or a reduction in their salaries without their consent.
The period for unpaid leave due to the precautionary measures, must be agreed by the employer and the employee. The contractual relationship between the employer and the employee remains for the duration of the leave. The employer is obliged (upon employee request) to book and pay for the cost of a return flight to the employee’s home country but only if such a flight is available. This obligation does not extend to covering the cost of flights for the employee’s family. If the employee is outside the country the employee’s residence visa will automatically renew even if the employee is not in the UAE at the time of expiry.
The leave period will end once the employee returns to the UAE and the precautionary measures period has otherwise ended. The unpaid period leave days are not included in the period of of service for the calculation of end of service gratuity.
“In the event that the employer does not agree with the employees to take the measures issued by the Ministry, then he may not take them. If the procedures are applied individually, without their consent, the employee may file a complaint with the Ministry.”
Leave encashment in UAE
How is leave encashment calculated in UAE?
UAE Labour Law explains in detail how the annual leaves and working hours are calculated as well as how should be paid in case of unutilized leaves. Annual leaves may not be forwarded for more than once within two consecutive years.
If your annual leaves are getting carried it is better you speak to your manager to use them.
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.
If a worker is on annual leave and is requested to work during his annual leave and leave is not carried forward next year, in this case employer is required to pay the worker regular salary in addition to a leave allowance which is equal to his basic wage only.
As per UAE Labour Law if employees completed six months but not one year in the organization they are entitled to an annual leave of two days per month and if they have completed one year of service, they are entitled to 30 days of service.
Annual Leave Salary calculation in UAE
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.
When the worker is on leave, he or she must receive his or her basic salary in addition to a housing allowance if such an allowance is stipulated in the employment contract.
Can we encash the annual leave?
Yes, When the employment contract is terminated or they stopped working after the period of notice period determined by law employees are entitled to payment of their wages for the annual leave that they have not taken. The payment will be calculated on the basis of the wages they received at the time when the leave was due. Some employers can also include allowance but this depends on a case-by-case and is solely the prerogative of the company.
According to Article (79) of the UAE Labour Law, an employee is entitled to receive cash in lieu of annual leave days not availed by him, if he was dismissed or if he left the service, after the period of notice stipulated by law.
Does my company have the right to deny me annual leave as a disciplinary measure against me?
According to UAE law, an employer cannot force an employee to forfeit annual leave and according to UAE Federal Law No 8 of 1980, as amended, Labour Law provides clear provisions for disciplinary actions by employers against their employees.
This is covered in detail in Chapter 6 of the UAE Labour Law, Article No 102 to Article No 112.
According to Article 102 of the UAE Labour Law, there are disciplinary rules that an employee should be aware of. However, Article 102 of the Labour Law states that disciplinary action may be taken by the employer or their representative in the following forms:
- Warning
- a fine
- suspension from work with reduced pay for a period not exceeding ten days,
- forfeiture or deferment of periodic increment, in establishments where the system of increments is applicable. Forfeiture or deferment of promotion in establishments where the system of promotions is present.
- Dismissal from service, but reserving the right to end-of-service benefits. Dismissal from service together with forfeiture of all or part of the benefits, provided that the penalties shall not be imposed for reasons other than those specifically prescribed in Article No 120 of this law.
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