How leave salaries are calculated in Dubai free zones

salary, UAE salary, paid basic, salary, legal, Jebel Ali free Zone Authority, Labour Law

Know your legal rights in the UAE.

By Ashish Mehta

Published: Mon 17 Feb 2020, 1:06 PM

Q. I am working in a free zone company in Jebel Ali and my monthly salary is Dh6,500. When we go on leave, we are only paid basic salary plus accommodation allowance, which is only 56 per cent of my regular salary. Is this legal?
A. Pursuant to your queries, as your employment is in a company based in and governed by the Jebel Ali free Zone Authority ('Jafza'), it may be noted that your employer shall be subjected to the provisions of Federal Law No. (8) of 1980 regulating Employment Relations in the UAE (the 'Employment Law'); and rules and regulations that are implemented by the Jafza. This is in accordance with Rule 11.5.3 of the Jebel Ali Free Zone Rules, 2017 (Seventh Edition), which states:
"11.5: Employment:
11.5.3: A customer and a sponsored employee may negotiate the terms and conditions of employment, provided the agreement is not contrary to these free zone rules and is in accordance with the Federal Labour Law No. 8 of 1980."
It may be noted that an employee availing his annual leave shall be remunerated with his annual leave salary that shall include his basic salary and housing allowance if applicable. This is in accordance with Article 78 of the Employment Law, which states:
"Article 78:
Each employee shall be entitled to his basic salary and the housing allowance, if applicable, in respect of his days of annual leave ... "
Based on the aforementioned provision of law you are entitled only for monthly basic salary and housing allowance as your annual leave salary.
However, if your employment contract registered with Jafza states that you are eligible for the entire monthly salary as your annual leave salary, then you are entitled to the whole salary. In this scenario, your employer may not be in a position to deny your annual leave entitlements quoting Article 78 of the Employment Law.
This is in accordance with Article 7 of the Employment Law, which states: "Any conditions contrary to the provisions of this law, albeit precedent to the date of effectiveness, shall be null and void unless they are more advantageous to the employee."

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: Readers may e-mail their questions to: or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

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