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Annual leave not taken to be paid in cash if employee leaves company -Dubai court issues new ruling.

The Dubai Court of Cassation has established a new legal principle with regards entitlement of annual leave balance of employees.

Employees are entitled to avail cash allowance for balance of annul leave only on two conditions:

First, if the office required the employee to work during his annual leave and could not carry forward the balance leave to the following year.

Secondly, if the employee is required to leave the workplace after the notice period or if the employer terminated the worker without giving the leave due to him.

The court also ruled that the end-of-service gratuity mentioned in the fixed-term contract should be paid fully to the worker if he decides to resign after completing five years in service.

Similarly, employees whose service at least more than one year at the time of resignation are entitled to a-third of end-of-the-service benefits.

The court issued the principles in a case where the employee did not receive vacation allowance as the person had left work without serving a notice period.

A director of a company filed a lawsuit in the labour court in Dubai against his company, demanding the firm pay him dues of Dh765,000 – which included his annual leave allowance for the last two years and end-of-service gratuity.

The court ruled that the employee is eligible for cash allowance for balance annual leave for the last two years and that the person is eligible to receive the full amount of the end-of-service gratuity as he spent 6 years and 4 months in service at the company.

Earlier, the Court of First Instance had dismissed the case and the plaintiff appealed before the Court of Appeal, which ruled in his favour. The Appeals Court ordered the company to pay him Dh347,000 – in cash allowance for annual leave and full end-of-service gratuity.

The company then challenged the ruling before the Court of Cassation.

The court based its ruling to the provisions of Articles 78 and 79 of the Federal Labour Law No. 8 of 1980.

The court said in the reasons for its judgment that the employer had failed to prove that the plaintiff got his dues.