UAE labour law: Can I encash unused annual leaves?


Question: I work in a firm in Dubai. I have a lot of unused leaves from 2020 and 2021. I hadn’t availed them since I was not able to travel because of the Covid-19 situation. Can I encash these leaves instead of using them? What is the law around this?


Answer: Pursuant to your queries, as you are employed in a mainland firm based in Dubai, the provisions of Federal Law No. 8 of 1980 Regulating Employment Relations in the UAE (the ‘Employment Law’) are applicable.

Employees who do not avail their annual leave for a specific period may claim it from their employer in cash.

This is in accordance with Article 78 of the Employment Law, which states: “The employee shall receive his basic pay in addition to housing allowance, if any, for the annual leave days. However, if the exigencies of work necessitate that the employee works during his annual leave in whole or in part, and the period of leave during which he has worked, has not been carried forward to the next year, the employer ought to pay him his wage in addition to cash in lieu of leave for his working days based on his basic pay.”

Based on the aforementioned provision of law, you may request your employer to pay cash in lieu for the days of annual leave which you have not availed in 2020 and 2021. The annual leave salary for an employee includes his basic salary plus housing allowance pay. Further, the cash in lieu for the annual leave not availed by the employee only includes basic pay.

However, if your employer is not keen on paying you cash for the unused leave, he/she may ask you to avail the accumulated leaves.


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Credit: Khaleej Times




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