Situation
An employee worked under a service agreement (civil law contract) from 24 March 2025, then was formally hired under an employment contract from 27 August 2025. Can the company voluntarily accrue annual leave for the period before the employment contract was signed, does this need to be registered with MOHRE, and is an internal memo sufficient for auditors and advisors?
ANSWER
Legal Basis
Federal Decree-Law No. 33 of 2021 and Cabinet Decision No. 1 of 2022 (Art. 10): the right to paid annual leave arises only for individuals working under a registered employment contract.
Since an employment relationship had not yet been established in the above-mentioned situation, there is no statutory obligation to accrue or compensate for annual leave for this period.
However, at the company's discretion, the leave may be accrued voluntarily.
This would be:
purely an internal HR and accounting decision
a gesture of goodwill (e.g. pro-rata accrual of annual leave days)
not a leg...