Questions & Answers
When we calculate the end-of-service benefits of a terminated employee, how do we calculate the unused leave?
One of our employees has been terminated due to the completion of the project and he has 36 days of unused leave.
When we calculate his end-of-service benefits, how do we calculate the unused leave?
As per the labor law -
Point no 9 of Article 29 of Federal Law 33 of 2021 mentions:
9. The worker shall be entitled to a wage for the accrued leave days if he quits the work before using them, regardless of the leave duration, with respect to the period for which he did not obtain his leave. He shall also be entitled to receive leave wage for parts of the year in proportion to the period he spent in work and it shall be calculated according to the basic wage.
So, should it be based on the wage (as mentioned in the 1st line of the Article) or will it be calculated based on the basic wage (as mentioned in the last line)?
Please give clarification on this to avoid disputes.
Thank you for answering!
Thank you for reaching out with your question regarding the calculation of unused leave for your terminated employee.
In accordance with Article 29, Point 9 of Federal Law No. 33 of 2021, the calculation of payment for unused leave should be based on the basic wage.
While the first line mentions "wage," the final line clarifies that the calculation should be according to the basic wage, which is the guiding factor in such scenarios.
This approach ensures that the employee is compensated fairly for the accrued leave days in alignment with the legal framework, thus helping you avoid any potential disputes.
