Encashment of Unused Annual Leaves in UAE
I still need to take several yearly leaves. They are supposedly about to “lapse,” therefore I’ve been advised to clean them. What are the basic guidelines for redeeming them? Is there a maximum number of leaves I may redeem? Encashment of Unused Annual Leaves in UAE.
In response to your inquiries, it is presumed that you have worked continuously for more than a year for a mainland employer established in the UAE. The rules of Federal Decree-Law No. 33 of 2021 on the Regulation of Employee Engagement (the “Employment Law”) and Cabinet Resolution No. 1 of 2022 on the Execution of Federal Decree-Law No. 33 of 2021 about the Regulation of Labor Relations (the “Cabinet Resolution No. 1 of 2022”) are therefore likely to apply.
For every year of employment with the employer, an employee in the UAE is entitled to 30 days of yearly leave. This is in line with Section 29(1)(a) of the Employment Law, which states: “The worker will have the right to a paid annual vacation of not less than a. 30 days a year for each year of service, without affecting any rights accruing to the employee before the date of entry into force of this Decree-Law.”
A worker may also carry over a maximum of 15 days of yearly leave into the next year. This is following Article 19 of Cabinet Decision No. 1 of 2022, which reads as follows: “According to the requirements of clauses (8) and (9) of Article 29 of the Employment Legislation:
- Depending on his income at the time of his entitlement to leave, the employee may agree with the employer to receive a cash allowance equal to no more than half of the annual leave for the following year.
- Upon termination of employment, the employee will receive a cash allowance equal to the remaining amount of his statutorily required yearly leave.
With each year of service, an employee’s annual leave becomes due. As a result, an employer may provide any financial allowance as agreed upon or at the end of each year of employment. According to the aforementioned legal rules, you are only permitted to carry forward 15 days of your annual leave from one year to the next or ask your employer to provide you a monetary reimbursement. Your base pay is used to determine how much cash is given in lieu of yearly leave.
After your employment with the current employer, you are qualified to receive a cash reward for any unused vacation time. This complies with Employment Code Article 29(9), which states that an employer has the right to be reimbursed for his days of leave if he leaves his employment before utilizing them, regardless of how many days are left on his leave. The employee is entitled to leave pay for portions of the year based on the duration of service, which is calculated using the base wage.
It should be emphasized that, by Article 29(4) of the Employment Code, the employer may choose how an employee takes their yearly vacation, Encashment of Unused Annual Leaves in UAE.
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