The UAE’s labour laws serve as the bedrock for governing employment relationships and safeguarding the rights of workers and employers. With a commitment to continuous improvement, recent updates have brought significant changes to the UAE Labour Law, including provisions allowing for leave during the notice period. This Provision acknowledges the practical needs of terminated employees seeking new job opportunities while adhering to specified guidelines.

Additionally, the law addresses the entitlement of employees to their accrued annual leave and outlines the calculation of corresponding leave wages. Understanding these amendments is crucial for ensuring compliance and fostering a fair and equitable working environment for all parties involved in the UAE’s labour market.

If you have recently submitted your resignation or been informed of the termination of your employment contract, you may wonder what will happen to any accrued annual leave days. In such situations, you might be curious whether you can utilize your annual leave during the notice period or if you are entitled to receive cash compensation instead.

Read more about – Changes introduced in the UAE Labour Laws: All you need to Know

Conditions relating to the Notice period under UAE Labour Law

When considering the conditions of a notice period as outlined in the UAE’s Labour Law, it is essential to review the relevant provisions. The law provides guidance on the requirements that must be met for a notice period to be considered valid. By examining the specific provisions, we can better understand the conditions that should be adhered to for a notice period to be legally recognized. Under Article 43 of Federal Decree-Law No. 33 of 2021 on Regulation of Labour Relations:

• The employer and the employee have the right to terminate an employment contract for a valid reason, with written notification given to the other party.
• The employee is required to fulfil their duties during the notice period, as specified in the contract.
• The duration of the notice period should be at least 30 days or exceed 90 days.
• During the notice period, the employee is entitled to receive their full remuneration based on their last salary.
• If the employer requests, the employee must continue working throughout the notice period. The law emphasizes the importance of adhering to these provisions concerning termination and notice periods.

The UAE’s Labour Law does not explicitly state an employee’s entitlement to utilise their pending annual leave during the notice period. Additionally, according to the regulations specified in Article 43(1), employees should fulfil their work responsibilities on all working days throughout the notice period.

Employees can request their employer to utilise unused annual leave during the notice period. If the employer and the employee reach a mutual agreement on this matter, the employee can then take their unused annual leave.

In the event of a failure to reach an agreement with the employer concerning the utilisation of accrued annual leave during the notice period, employees have the right to receive monetary compensation for those unused leaves following the regulations stipulated in the Labour Law.

The law does not explicitly address the utilisation of annual leave during this time, highlighting the importance of considering the general provisions and guidelines related to notice periods in the UAE.

Article 43.5 of the UAE labour law stipulates that if an employer terminates an employment contract, the worker can take one day off without pay per week during the notice period to search for another job. The worker can choose the day of absence if they notify the employer at least three days before. It’s important to note that the employer must comply with this law and allow the worker to take the specified day off.

Furthermore, if the employee has accumulated annual leave but has not taken it, the employer must include payment for that leave as part of their final settlement.

Also read – Calculation of End of Service Gratuity in UAE

 

Under Article 29(9) of UAE New Labour Law

In accordance with Article 29 of the labor law, the employer cannot prevent employees from utilizing their accumulated annual leave beyond a period of two years, unless the employee chooses to carry it forward or receive a monetary compensation for it, following the applicable regulations at the establishment and the Implementing Regulation.

If an employee resigns before utilizing their accrued annual leave, they are entitled to receive a salary for the days of leave that they did not use, regardless of the duration of the leave, covering the period for which they were unable to take their leave.

Annual Leave in UAE During Notice Period: Rights, Scenario and Legal Clarifications

The UAE Labour Law regulates the process of the end of employment relationships and sets the rights and responsibilities of employers and employees in the course of the notice period in a clearly outlined way. Among the most popular subjects of misunderstand is whether an employee is entitled to take annual leave within the notice period, and how should the unused leave be handled in case it is not used.

It is imperative to grasp such provisions to avoid lawsuits and attain a fair outcome by the end of a settlement.

Annual Leave in a Period of Notice: Dismissal vs. Resignation

The rights of an employee within the period of the notice vary with the termination of employment contract.

If the Employee Resigns

• The worker should be given a chance to work until the time of notice.

• The amount of annual leaves in this period cannot be automatically taken.

• The employee can ask to use the accrued annual leave, which is subject to the approval of the employer.

• In case the employer declines, the employee is legally entitled to receive monetary compensation of the unused leave as part of the final settlement.

Legal position:
The employer can deny the leave during the resignation period with payment of the unused leave in cash.

In Case the Contract Is Terminated by the Employer

• The employee should give the notice period of the contract.

• Article 43(5) makes the employee eligible to job-search leave.

• The employer has to approve annual leave on the notice period.

• The annual leave that has been unused must also be paid in full during the final settlement.

Legal position:
Dismissal provides an added security, but unclaimed leave should be given every time.

Is Annual Leave Refusal During Notice Period by an Employer in UAE?

Yes. In the UAE Labour Law, employers are permitted to reject annual leave requests within the notice period.

This right is not absolute though.

An employer that denies the leave must:

• Maintain proper records of leave

• Take leave compensation in the final settlement

• Do not deduct any salary and impose any penalty to leave refusal

When Refusal Is a Criminal Offence

An employer could have violated the law when he or she:

• Unemployed leave is not paid

• Salary is deducted unfairly

• Balances on leave are erased or changed

• Absence of the employee is noted as unjustified

Employees in this case can either file a complaint with MOHRE or seek legal redress.

What Happens to Unused Annual Leave in Final Settlement?

Article 29 of the Federal Decree-Law No. 33 of 2021 provides that employees who part ways with their jobs without consuming the accrued annual leaves have a right to payment of all the unused days of leave.

Calculation Principles

• The leave compensation is computed relative to the past wage that was being paid to the employee

• Usually based on basic salary, although this may be indicated in the employment contract

• Includes all unused leave days, irrespective of the number

Practical Example

A worker whose basic wages are AED 6,000 and 15 days of leave without utilization:

• Daily wage: 6,000 ÷ 30 = AED 200

• Leave compensation: 200 × 15 = AED 3,000

This should be provided in the final settlement of the employee.

Job Search Leave During Notice Period (Article 43.5 Explained)

Article 43(5) of the UAE Labour Law gives employees the right to job-search leave, under certain circumstances.

Key Conditions

• This can only be applied in cases where the employer ends the contract

• Allows the worker one weekday off unpaid

• The employee should inform the employer as far as three days before

• This leave should be permitted by the employer

This leave is not identical to annual leave and does not cause a loss of accrued balances of leave.

What Should Be Done If Annual Leave Is Denied During the Notice Period?

In case an employer denies an annual leave or does not compensate an employee on unused leave, the employee must:

• Send a letter to the HR or management

• Seek clarification about final settlement calculation

• Maintain contracts of employment, salary slips and leave records

• Complain to MOHRE where necessary

• Consult a lawyer where there is no consensus

Timely intervention assists in safeguarding the statutory rights and lawful settlement.

Frequently Asked Questions (FAQs).