UAE employment law does not explicitly permit combining compensatory leave with annual leave, but a company’s internal HR policy can allow it, provided the policy offers terms more favourable than the statutory minimum.
The answer matters for mainland Dubai employees who have built up compensatory days from working on public holidays and want to attach them to an upcoming leave block.
What the law says on combining compensatory and annual leave
Federal Decree-Law No. 33 of 2021, which governs private-sector employment and came into effect on 2 February 2022, does not address combining compensatory leave with annual leave. The law and its ministerial decrees are silent on the point.
Only three leave types may be combined with annual leave under the law: unpaid leave, bereavement leave, and parental leave. Under Article 32, bereavement leave is five days and parental leave is five days per parent, as confirmed by the UAE Government Portal on types of leave in the private sector.
Compensatory leave is not in that list. An employee who worked a public holiday is entitled, under Article 28(2) of the law, to either a substitute rest day or the normal day’s wage plus an additional 50 per cent of basic salary. The choice of remedy is governed by what was agreed or what the employer’s policy sets out.
When an employer’s HR policy changes the position
Article 65(4) of the law gives employers the room to go further than the statutory floor. It states that an employer may establish programmes and bylaws that are more beneficial to an employee than those in the decree-law, and that where such programmes conflict with the legislation, the more favourable condition applies.
In practice, this means that if a company’s HR handbook explicitly permits combining compensatory days with annual leave, the employee is entitled to do so. Employees should check that policy before approaching HR.
Employers with 50 or more workers are required to have such a handbook in place. Under Article 14 of Cabinet Resolution No. 1 of 2022, the implementing regulation of the decree-law, those establishments must set internal rules covering work instructions, penalties, promotions, and procedures for ending employment relationships.
For employees at companies below that threshold, or where the handbook is silent, the statutory default applies: compensatory leave and annual leave cannot be combined without the employer’s explicit agreement.
Annual leave scheduling and carry-forward rules
Separately, employers control when annual leave is taken. Under Article 29(4) of the decree-law, an employer must notify an employee of leave start and end dates at least one month in advance. The scheduling is based on operational requirements or mutual agreement.
Unused annual leave does not automatically lapse. Article 29(5), as set out in the UAE Legislation Portal entry for the decree-law, allows a worker to carry forward leave balance to the following year with employer approval and in line with the establishment’s internal regulations. The decree-law has been amended three times since its original publication, with the last update recorded on 29 July 2024.
Employees uncertain about their specific entitlements should raise the matter directly with their HR department and seek to reach a written mutual agreement. If the internal policy does not cover the combination, the Ministry of Human Resources and Emiratisation (MoHRE) operates a workplace advisory service where disputes and queries about entitlements can be lodged.
