Understanding annual leave under the UAE Labour Law is one of the most searched employment topics among workers and employers. Questions often center on compensation, unused leave, public holidays, and final settlements. The law outlines clear provisions, but real-life scenarios can still create confusion. Employees want to know when they’re entitled to payment, how leave balances work, and what happens if leave is deferred. Employers also need clarity to stay compliant while managing operations. Guidance from the Ministry of Human Resources and Emiratisation remains the most reliable source for case-specific resolutions.

Compensation for Unused Leave Under UAE Labour Law

Under UAE Labour Law, employees cannot be repeatedly denied their annual leave without compensation. Employers may defer annual leave only once within two consecutive years, and payment must accompany that deferral. If work demands prevent an employee from taking leave, the employer must compensate them with salary and cash in lieu of those days. Payment is calculated based on the employee’s basic wage. This ensures employees are not financially disadvantaged when operational needs override leave plans. Workers who consistently miss leave should seek clarification from HR and official authorities. The law prioritizes fairness while allowing businesses flexibility.

UAE Labour Law and Gratuity Pay During Absence

Gratuity calculations depend on multiple factors, including contract type, duration of employment, and final basic salary. Employees who leave the country or cannot return due to emergencies still retain gratuity rights under specific conditions. The law evaluates eligibility based on completed service and contractual terms. Employers must assess each case individually to determine accurate end-of-service benefits. Company policies may also influence calculations alongside legal provisions. Employees should review their contracts carefully before filing claims. Professional advice helps prevent misunderstandings during settlements.

Public Holidays and Annual Leave Calculations

Public holidays and weekends play a critical role in annual leave calculations under UAE Labour Law. If holidays fall within an approved leave period, they are counted as part of the leave days. However, if they occur outside the approved leave period, they are treated as paid public holidays. This distinction affects salary calculations and leave balances. Employers typically decide the start and end dates of annual leave. Approved schedules ensure transparency for both parties. Company policy may add further clarification depending on workplace norms.

Can Employers Deduct Public Holidays From Leave?

Public holidays cannot automatically be deducted from leave balances unless they fall within the officially approved leave period. For example, if an employee is scheduled to resume work during a public holiday, the day is treated as paid time off. Employers must calculate leave based on approved dates rather than actual return days influenced by holidays. This prevents unnecessary loss of leave days for employees. HR departments often rely on internal policy to interpret complex scenarios. Clear documentation helps avoid disputes. Legal clarity supports consistent workplace practices.

Leave Balances and Final Settlement Rules

Employees who resign or are terminated are entitled to payment for unused annual leave. UAE Labour Law states that cash in lieu must be calculated based on the salary at the time the leave became due. Generally, employees receive 30 days of annual leave per year, and deferral is limited. In most cases, leave cannot be carried forward indefinitely without compensation. Final settlements should reflect all outstanding leave days based on employment agreements. Company policies may allow additional carry-forward beyond legal minimums. Employees should confirm leave balances before finalizing exit procedures.

Weekends and Leave Periods Explained

Weekends may be included in annual leave calculations if they fall within the approved leave duration. For example, if leave begins before the weekend and ends after it, those days can be counted as part of the total leave. However, some companies calculate leave using only working days depending on internal policy. This creates variation across industries and employers. Employees should confirm how their organization tracks leave days. Transparent communication between HR and staff prevents misunderstandings. Clarity supports better planning for both sides.

UAE Labour Law in Practice Across Workplaces

Across the United Arab Emirates, workplaces apply UAE Labour Law alongside internal company policies to manage annual leave effectively. The law establishes minimum protections, while employers may offer more generous benefits. Understanding rights and responsibilities helps employees make informed career decisions. Employers benefit from compliance by building trust and stability within teams. Annual leave policies also influence retention and job satisfaction. Clear guidelines create predictable outcomes for everyone involved. In a fast-changing labor market, clarity around leave is more important than ever.