Employer has to pay unpaid leave salary to quitting staff

The employer is obliged to pay leave salary to a resigning employee, provided the employee has given notice of his intention to quit as per the job contract, according to a new legal principle laid down by the Dubai Court of Cassation.

The new legal principle was established when the director of a company filed a lawsuit against his employer, seeking a compensation of Dh765,000, including Dh100,000 as unpaid leave salary.

In his lawsuit, the plaintiff said he had worked for six years and four months as director of administration on a monthly salary of Dh50,000. He had given three months’ notice to the company before quitting, as per the terms of his job contract.
The Court of First Instance ruled that the plaintiff is eligible for a compensation of Dh83,000 only and rejected his demand for unpaid leave salary.

The plaintiff then approached the Court of Appeal, which raised the compensation to Dh347,000 which included unpaid leave salary.

The company appealed this verdict before the Court of Cassation, which issued a ruling rejecting the company’s arguments and upholding the verdict of the appellate court. The Court of Cassation justified its verdict on the ground that the employee had given notice of three months to the employer before leaving and had not been paid annual leave salary for two years.