Question: I work in a company in Dubai and plan to resign soon. I have five compensatory leaves and 18 annual ones left. My employment contract stipulates one month of notice period. Can I avail either the compensatory or the annual leaves during this period? If I can’t avail my leftover annual leave, can I encash it? Please advise.
Answer: Pursuant to your queries, we assume that you are employed by a mainland company in Dubai. Therefore, the provisions of Federal Law No. 8 of 1980 Regulating Employment Relations in the UAE (the ‘Employment Law’) are applicable.
It should be noted that in the UAE, an employee who intends to resign needs to serve a notice period in accordance with the employment contract. During the notice period, he or she should work on all the working days and may not avail any other leave.
If the employee avails leave during the notice period, he or she may have to compensate the employer monetarily. This is in accordance with Article 119 of the Employment Law, which states: “If the employer or the employee has failed to serve notice to the other party for termination of the contract or has reduced the notice period, the party obliged to serve the notice shall pay to the other party an indemnity called ‘Compensation in lieu of notice’, and it is incurred by the other party as a result of failure to give notice or for reduction of said period, and the indemnity shall be equal to the employee’s pay for the notice period in full or in proportion to the diminished part. In regard to employees on monthly, weekly, daily or per hour work pay, the notice allowance shall be computed on the basis of last pay earned by them. With regard to employees paid on piece work basis, allowance shall be calculated on the basis of the average daily pay provided for in Article (57) hereof.”
Therefore, based on the aforementioned provision of law, it is recommended that you work on all the working days of the notice period. However, you may request your employer for the unused compensatory leave or annual leave during your notice period. If you and your employer mutually agree on the same, then you may avail them.
In the event your employer does not agree, then you are entitled for cash in lieu of unused annual leaves. This is in accordance with Article 79 of the Employment Law, which states: “The 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. Cash in lieu of leave is calculated on the bases of pay received by the employee at the time of maturity of such leave.”
Further, we assume that the compensatory leaves which you have not availed are for working during your weekly days off or on any public holiday. For this, the employee needs to be granted additional pay or compensatory leave. This is in accordance with Article 81 of the Employment law, which states: “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 per cent 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.”
Therefore, once you resign from your employment and serve the stipulated notice period, you are entitled for cash in lieu of unused annual or compensatory leaves.
Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: firstname.lastname@example.org or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.
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