Ask the Law: How is annual leave allowance calculated under UAE’s new labour law?
Question: I have been working in a private company for two years on commission. In the event of taking the annual leave, how is it calculated? The employer often asks me to work overtime for more than two hours, so how is the overtime allowance calculated? Do I have the right, according to the new Labour Law, to work for another company, and do I have to obtain the approval of the current employer? Please advise.
Answer: The annual leave allowance should be calculated, as per Article 23 of the new Labour Law, according to the average amount the worker received for the actual working days during the last six months. Article 23 of the new Labour Law states: “The daily wage of workers who receive their wages on piecework basis shall be calculated according to the average amount the worker received for the actual working days during the six months preceding the request or claim regarding any issue related to the wage.”
Regarding overtime, it is calculated as per Article 19 of the law as follows:
a. If the work conditions necessitate that the worker works for more than the normal working hours, the excess period shall represent overtime, for which the worker shall receive a wage equal to the wage corresponding to the normal working hours, which is calculated according to the basic wage plus an increase of not less than (25 %) twenty-five per cent of that wage.
b. If the work conditions require that the worker works overtime between 10pm and 4am, the worker shall be entitled, regarding the overtime, to receive the wage prescribed for the normal working hours calculated according to the basic wage plus an increase of not less than (50%) fifty per cent of that wage. The workers working based on shifts shall be excluded from this clause.
c. If the circumstances require that the worker works on the weekend specified in the employment contract or work regulation, he shall be compensated with another day off or he shall be paid the wage of that day according to the wage established for normal working days, plus an increase of not less than (50%) fifty percent of the basic wage for that day.
Work for another company
If you are still working in the company, then you cannot work with another company at the same time without the acceptance of the current employer and in accordance with the provisions of the Labour Law. But if the employment relationship is terminated, then you have the right to work for another company and you do not need the acceptance of the current employer.