The dilemma that these employers have is that it leads to a high leave balance that gets accumulated in the balance sheet. From the point of view of the employer, he does not prefer such carry forward, firstly due to the above reason of difficulty in accounting and secondly, it creates a situation where the employees tend to take a long vacation which eventually leads to the reduction in the productivity, thereby affecting the business. The employment lawyers of Dubai will tend to discuss the steps taken by most companies concerning annual leaves of employees during the pandemic and their justifications under the Employment Law.

What does the Law say?

The employment law of UAE is subjected to two legislation, i.e. Regulations from DIFC and ADGM, namely DIFC law no. 2 of 2019 and ADGM employment regulations respectively. For the rest of the employees of the private sector of the UAE, they are covered under the umbrella of the Federal Law no.8 of 1980. The above-mentioned set of rules provide the employees with the distinct regulations which are present at their disposal. Such regulations are discussed below along with some of the suggestions.

The DIFC and the ADGM regimes on the employment law are somewhat similar to each other. The legal aspect of the annual leaves under these regulations are inclusive of provisions such as: Firstly, if the employee has completed 90 days of employment in the firm, he will be entitled to 20 days of paid leaves per year. In case, the employees have not used such paid leaves, then they are entitled to carry forward only 5 paid leaves which have been accrued to them but have not been utilized. Such carry forward is subject to expire automatically after the 12 months of the following annual year. Owing to the annual leave, the employee can only get payment of such leaves if it is provided for in the agreement between the employee and the employer. Some employers can also require their employees to give a seven days prior notice for the leaves the employee is planning to take with respect to the current annual year.

Unlike the above, the UAE labor law provides that if the employee has completed one year of employment service in the firm, he will be entitled to 30 calendar days of paid leaves per year, which means approximately 22 working days of paid leaves. The employer enjoys the power of dictating when can an employee take leaves owing to these paid annual leaves in a given holiday year. The legal framework provides that, in case the leaves of the current holiday year is not utilize till the end of the year, the employee is vested with the power to either get those accrued holidays en-cashed or get them carried forward to the next year. It is thus implied that the rule of “use it or lose it“ is not provided for in the framework. No limitation is provided for as in case of the DIFC rules for the number of holidays they can carry forward. The court just provides that in case of the termination of the service, the employee will be allowed to encase the annual paid leaves of the two holiday years prior to such termination.

In the current scenario of the pandemic, the employers are required to efficaciously manage the paid leaves regime in order to ensure sufficient employee coverage as well as the continuity of the business. They can do so through following ways: Firstly, they need to communicate properly the annual leave policy to their employees and in case of the carry forward rule, they have to clearly reach the consensus with the employees; secondly, there must be a proper dialogue mechanism between the employee and the employer, whereby the employer should on regular basis inform the employee that they should utilize the annual paid leaves before their expiry and in case the facility of encashment is available, such communication shall also be done without any ambiguity; and lastly, a reminder or a follow up mechanism must be adopted by the employer which provides with the continuous reminding facility for the employees so that they are continuously reminded of the number of leaves they can take during the year and the ones which will be getting expired soon.