An employee resigns in 2025 and has unused annual leave days carried over from 2024, plus leave accrued in 2025. Their basic wage changed between the two years (e.g., AED 5,000 in 2024 → AED 10,000 in 2025).
The wage used is always the basic wage at the time of termination — regardless of when the leave was accrued.
- Article 29(9) of Federal Decree-Law No. 33 of 2021 entitles an employee to compensation for all unused annual leave days upon resignation, including leave from prior years and the partial current year.
- The law does not distinguish between leave accrued in earlier years vs. the year of termination.
- The law does not tie the calculation to the wage that was in effect when the leave was originally accrued.
- Instead, the calculation is based on the employee's basic wage at the time of termination.
Note: as per the Labour Law, basic wage is the fixed amount stated in an employment contract. It does not include any allowances or benefits of any kind. Wage is a broader concept. It includes th...