UAE: Unused Annual Leave Compensation After Job Termination: Key Info

Dubai: Employees in the UAE are entitled to compensation for unused annual leave upon job termination, according to the UAE Labour Law.

This entitlement includes payment for any accrued leave days that were not taken during employment.

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A recent inquiry highlighted a case where an employee, terminated after four years and nine months of service, sought clarification on their annual leave compensation.

The individual had received payment for only three annual leave salaries and was unsure about the entitlements for the remaining leave days.

Mohamed Elmasry, an associate at Al Suwaidi and Company, explained that under Article 29 of the Federal Decree Law No. 33 of 2021, employees accrue 30 days of annual leave for each year of service, along with pro-rata leave for partial years.

Upon termination, employees must receive a cash allowance for any unused leave based on their basic wage.

Elmasry emphasized the importance of filing claims for unpaid leave within one year of entitlement, as stipulated by Article 54(7) of the law. Timely action is crucial to ensure that employees receive their rightful compensation.

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