UAE court rules employee entitled to full vacation pay, orders Dh434,884 settlement
The Abu Dhabi Court of Cassation has ruled in favor of a former employee, confirming her entitlement to full vacation pay for the entirety of her employment period. The court ordered her previous employer to pay Dh434,884, reinforcing the UAE’s legal protection for employees with unused vacation leave.
Case details
The employee had worked for the company from January 4, 2018, to June 30, 2024, earning a basic salary of Dh36,000 and a total monthly salary of Dh60,000 with profit-sharing.
After her resignation, she filed claims including:
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Outstanding wages: Dh72,000
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Vacation pay: Dh247,464 (initial claim)
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Notice pay: Dh60,000
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End-of-service gratuity: Dh180,000
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Commission: 25% of monthly profits exceeding Dh110,000
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Late payment interest: 5% until full settlement
Court’s progression of rulings
On January 28, the Court of First Instance awarded her Dh323,400, covering partial vacation pay (limited to the last two years), outstanding wages, and end-of-service gratuity. Other claims, including full commissions and vacation pay for the entire employment period, were rejected.
The employee appealed, and based on an expert’s report, the Appeal Court increased the settlement to Dh379,400. Still, she contested the ruling before the Court of Cassation, arguing that her full vacation pay was not accounted for.
Final ruling
The Court of Cassation upheld the expert’s findings on commissions but amended the vacation pay decision. It confirmed that, under UAE Federal Labor Law No. 33/2021, employees are entitled to payment for all unused leave covering their full service duration, not just part of it.
Accordingly, the court revised the settlement to Dh434,884, including vacation pay for the entire six years, five months, and 26 days of service. The ruling also required the employer to pay legal fees, including Dh1,000 for the employee’s attorney.
Significance of the judgment
The case highlights the UAE’s strong legal framework protecting employee rights, particularly regarding unused leave entitlements. The decision establishes a clear precedent that vacation pay must cover the entire length of employment, ensuring fair treatment for workers leaving their jobs.
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