Employee can encash leave on resignation, termination

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Employee can encash leave on resignation, termination

Published: Mon 3 Jun 2013, 8:58 AM

Last updated: Tue 7 Apr 2015, 5:07 PM

I have been working for a private company in Ajman for the last five years. My salary comprises basic salary and other allowances. The company has provided staff accommodation.

I would like to know the calculation of leave salary. Does the company pay leave salary on basic salary only, which my company does? How can I recover my leave salary on other allowance once I leave this company?

An employee is entitled to annual leave salary based on the basic salary and the housing allowance in accordance with Article 78 of the Federal Law No. 80 of 1980 regulating labour relations (the ‘Law’) which states: “Every worker shall be entitled to his basic wage and the housing allowance if applicable in respect of his days of annual leave where the circumstances of the work make it necessary for a worker to work during all or part of his annual leave and the days of leave on which he works are not carried forward to the following year, the employer shall pay him his remuneration, plus a leave allowance in respect of the days worked at a rate equal to his basic wage.

It shall be unlawful in any circumstances to employ a worker during his annual leave more than once in two successive years.”

Since you are provided accommodation by your employer, the employer has not included any housing allowance in calculating your annual leave salary.

You are entitled to encash annual leave not utilised, upon resignation or termination of your employment in accordance with Article 79 of the Law which states: “Where a worker is dismissed or leaves his job after the period of notice prescribed by law, he shall be entitled to remuneration in respect of any days of annual leave not taken. Such remuneration shall be calculated on the basis of the remuneration that he earned on the date on which the leave became due.”

Further, your employer should also pay you leave salary prior to commencement of your annual leave in accordance with Article 80 of the Law which states: “An employer shall pay a worker, before the commencement of the employees annual leave, the entire remuneration due to him, plus the leave pay prescribed for him in accordance with the provisions of this Law.”

Job ban

Will I get a ban if I do not finish my two years contract with my employer? My contract will expire on August 2014. In the job offer letter which I signed, my job title is that of a secretary and the company name is not actually the name stated on my labour card.

It is learnt that, currently, the Ministry of Labour does not impose a ban on the employee from working for another employer if the employee has completed one year of continuous employment with his current employer. Since you have not yet completed continuous employment for over one year with your current employer, there may be an employment ban on you in case you wish to resign from your current employment and work for another employer. This ban could be removed by paying the prescribed penalty to the Ministry of Labour.

Further to the initial offer letter from your employer, you and your employer must have executed a bilingual employment contract and filed the same with the Ministry of Labour. It may be argued that this bilingual employment contract supersedes the initial offer letter and therefore the name of the employer as stated on the bilingual employment contract prevails.

Sponsoring parents

I have been living in the UAE for more than 32 years and I am going to retire from service at the end of this year. My daughter is married here and her husband works at Dubai Drydocks with a monthly salary of more than Dh10,000. My daughter’s salary is Dh4,500. Our son is also working, but his salary is only Dh2,200.

Now after staying here for so long, my wife and I are skeptical about going back to Pakistan as there will be nobody there to take care of us. So kindly advise of any legal and humanitarian grounds of staying here with our children.

Your son-in-law meets the minimum salary criteria required to sponsor parents in the United Arab Emirates. However, he should submit a request to the General Directorate for Residency and Foreigners Affairs seeking their approval to sponsor you and your wife as dependants. This request may also state that there is no immediate family member back home in Pakistan to take care of you and your wife. It will be prudent to contact the General Directorate for Residency and Foreigners Affairs for further details.

Ashish Mehta, LLB, F.I.C.A., M.C.I.T., M.C.I.Arb., is the founder and Managing Partner of Ashish Mehta & Associates, a legal consultancy firm in Dubai. He also practises in India, United Kingdom and Singapore. He has worked with international and commercial legal procedures, providing analysis and counselling on complex legal documents and policies such as commercial transactions, securitisation, real estate acquisitions, financial restructuring for distressed assets, mergers and acquisitions, arbitration and litigation issues. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

By Ashish Mehta (Legal View)

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