Annual Leave Rights of Part-Time Employees Under UAE Labour Law: Understanding Pro Rata Calculations and Statutory Minimums

Part-time employment has become increasingly common in the UAE labour market, offering flexibility for both employers and workers. However, part-time workers are often unsure about their rights, particularly in relation to annual leave. Under Federal Decree-Law No. 33 of 2021 (the UAE Labour Law) and its Executive Regulations (Cabinet Resolution No. 1 of 2022), part-time employees are entitled to annual leave, with their entitlements calculated proportionately based on actual working hours rather than treated as an exception to the law.

Who is a Part-Time Worker?

In the UAE, a part-time worker is generally defined as someone employed for fewer working hours or days than a full-time counterpart, as clearly specified in the employment contract. While the Labour Law does not define a minimum number of hours for part-time work, it requires that any employee working under a part-time contract must be granted specified labour rights, including annual leave.

Importantly, all workers in the private sector (outside free zones such as the DIFC or ADGM) are covered under the Labour Law. This includes part-time employees, who are not excluded from standard statutory entitlements such as annual leave, sick leave, maternity leave, public holidays and gratuity, although some provisions may be calculated on a prorated basis.

Annual Leave Under UAE Labour Law

The UAE Labour Law guarantees that an employee must be granted paid annual leave during each year of service. The baseline entitlement for full-time employees is as follows:

• Two days of annual leave per month of service once the employee has completed six months but less than one year of service.
  
  
• Thirty days of annual leave per year for employees who have completed one year of service.
  
  

A worker who leaves employment before using their accrued annual leave is entitled to cash compensation for unused leave, calculated based on their basic wage.

While these figures are often cited for full-time employees, the same principles apply to part-time workers, adapted to reflect their actual working hours.

How Annual Leave is Calculated for Part-Time Workers

Under the UAE Labour Law and its implementing regulations, a part-time worker’s annual leave entitlement is neither separate nor excluded; instead, it is calculated in proportion to the employee’s working hours compared to a full-time schedule. The key legislative provision is Article 18 of Cabinet Resolution No. 1 of 2022, which governs part-time employee leave entitlements.

The calculation process follows these broad steps:

• Total Working Hours: Identify the total number of hours the part-time worker is contracted to work in a year.
• Conversion to Full-Time Equivalent: Compare these hours with the total working hours of a full-time employee in the same company or sector (full-time employment is typically up to eight hours per day, five days per week).
• Proportionate Leave: The ratio of part-time hours to full-time hours determines the percentage of annual leave the part-time worker should receive. This percentage is then applied to the standard annual leave entitlement for full-time employees.
  
  

For example, if a full-time worker works 2,000 hours per year and a part-time employee works 1,000 hours, the part-time worker would be entitled to approximately 50% of the full-time annual leave entitlement.

Minimum Annual Leave for Part-Time Workers

The law also establishes a minimum annual leave threshold for part-time employees. Even if the calculated entitlement based on hours worked is minimal, part-time workers are guaranteed at least five working days of paid annual leave per year. This safeguard ensures that part-time employees retain a meaningful leave entitlement and prevents employers from minimising leave by artificially limiting working hours.

Additionally, fractional days in leave calculations are generally rounded up, meaning that any portion of a day beyond the calculation formula is treated as a full day of entitlement.

Practical Example

To illustrate:

• A full-time employee works 2,000 hours per year and is entitled to 30 days of annual leave after completing one year of service.
• A part-time worker contracted for 1,200 hours per year has worked 60% of the full-time hours (1,200/2,000).
• Accordingly, the part-time employee’s annual leave entitlement would be calculated as 60% of 30 days, resulting in 18 days (subject to rounding and contractual terms).
  
  

If this calculated amount falls below the statutory minimum of five days, the part-time worker would still be entitled to at least five days of paid leave per year.

This approach ensures fairness by aligning leave entitlements proportionately with actual work input and statutory requirements.

Other Related Entitlements and Considerations

Public Holidays: Part-time workers are entitled to official public holidays that fall on days they would normally work, with pay, in the same manner as full-time employees. If they are required to work on a public holiday, they must receive compensation, either in the form of a compensatory day off or enhanced pay.

Annual Leave Scheduling: Employers generally determine the timing of annual leave based on operational requirements, although this should be agreed with the employee. Workers must be given at least one month’s notice of official leave dates.

Termination and Leave Encashment: When a part-time employee leaves employment, they are entitled to payment in lieu of any unused annual leave accrued up to the termination date. This is calculated on the basis of the employee’s basic wage and prorated entitlements.

Contractual Clarity: It is essential that part-time employment contracts clearly specify working hours, leave entitlements, the applicable calculation method and related terms. While statutory rights cannot be waived, a clear written contract helps prevent disputes and misunderstandings.

Common Misconceptions

A common misconception among employers is that part-time workers are exempt from annual leave requirements. This is incorrect. All private-sector employees are covered by UAE labour law provisions, including annual leave and other statutory rights, regardless of whether they work full-time or part-time.

Another misunderstanding is that part-time employees should receive only a nominal number of leave days due to reduced working hours. In reality, the law mandates proportional calculation based on hours worked, with a guaranteed minimum of five days of paid annual leave per year.

Conclusion

The UAE’s labour law framework is designed to protect the rights of all workers, including those employed on a part-time basis. Annual leave is not a privilege reserved exclusively for full-time employees; part-time workers are entitled to paid annual leave calculated in proportion to the hours they work, subject to a guaranteed minimum of five days per year.

By converting part-time working hours into a full-time equivalent and applying proportional formulas under Cabinet Resolution No. 1 of 2022, the law promotes fairness, transparency and consistency in leave entitlements. Both employers and employees should ensure that working hours and contractual terms are clearly documented to maintain compliance, avoid disputes and recognise that statutory rights, including annual leave, cannot be reduced by contractual agreement.

 

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