Six years with four months of unpaid leave
Unpaid leave is the deduction people forget, partly because it was approved at the time and felt like a favour. Under the decree-law, approved or not, days without pay are not service. This case puts a number on four months of it.
The facts
- Project engineer, Dubai mainland, private company under the federal law
- Started 1 March 2020; employment ended 1 March 2026 after the employer gave notice
- Basic wage 12,000 AED; total package 20,000
- 120 days of unpaid leave in 2023, approved in writing, to care for a parent abroad
The rule
Two provisions point the same way. Article 33(2) says unpaid leave "shall not be included in the worker's service term at the employer". Article 51(4), in the gratuity article itself, says "the unpaid days of absence from work shall not be included in the calculation of the service term". The employer's approval does not change that. It is the absence of pay, not the absence of permission, that takes the days out.
Step 1 — the service period
On the calendar, 1 March 2020 to 1 March 2026 is six years. Take off the 120 unpaid days and the effective end of service moves back to 1 November 2025:
- 1 March 2020 to 1 March 2025: five whole years
- 1 March 2025 to 1 November 2025: 245 days of a 365-day year = 0.671
- Service for gratuity: 5.671 years
It does not matter that the leave was taken in 2023. The deduction shortens the total, and the shortened total is what goes into the formula.
Step 2 — the entitlement
Daily basic: 12,000 ÷ 30 = 400 AED.
- First five years: 5 × 21 = 105 days
- Remaining 0.671 years: 0.6712 × 30 = 20.137 days
- Total 125.137 days × 400 = 50,055 AED
Without the unpaid leave: 105 + 30 = 135 days × 400 = 54,000 AED.
The four months cost 3,945 AED. Notice why it is that much: the deduction comes off the end of the service period, which here is time beyond the fifth year earning 30 days a year. 120 days is 0.329 of a year; 0.329 × 30 days × 400 AED = 3,945. Had the same 120 days been deducted from someone with under five years' service, it would cost at the 21-day rate instead — 2,762 AED on the same basic.
When unpaid leave wipes out the gratuity
The deduction can also take service below the one-year threshold. Suppose the same employee had left on 1 March 2022, two years in, having taken a 400-day unpaid sabbatical in the middle. Two calendar years less 400 days is 330 days of service — 0.904 of a year. No gratuity is payable at all, because the year of continuous service required by Article 51(2) has not been completed.
It is an extreme example, but shorter versions of it happen: a year and two months on paper, with eight weeks of unpaid leave, is under a year of service.
What is not unpaid leave
The deduction is for days without pay. These do not come off:
- Paid annual leave, including leave taken during the notice period
- Sick leave on full or half pay under Article 31(3) — the first 15 days at full pay and the next 30 at half pay
- Maternity leave under Article 30(1): 45 days at full pay and 15 at half pay
- Public holidays and weekends, which are part of the calendar service
Two kinds of absence are expressly excluded by the decree-law itself, alongside ordinary unpaid leave:
- Sick leave beyond the first 45 days, which Article 31(3)(c) makes unpaid
- The further 45 days of unpaid absence a mother may take after maternity leave for illness arising from pregnancy or childbirth — Article 30(2) says that period "is not included within the service term" for end-of-service benefits
The rest of the settlement
| Item | Amount | Basis |
|---|---|---|
| End-of-service gratuity | 50,055 | 125.14 days at 400 AED |
| Final salary | 20,000 | Full package for February |
| Untaken annual leave | by days | At 400 AED a day, Article 29(9) |
| Notice pay | — | Notice worked |
| Repatriation expenses | check | Article 13(12) |
How to check the employer's number
- Ask for the unpaid-day count in writing, with the dates. Payroll systems sometimes record half-days, or record a day of unauthorised absence as unpaid leave. Both affect the figure.
- Check it against your own record — the approval emails, the payslips for the months concerned. The payslip will show the deduction from salary, and the days deducted from pay should match the days deducted from service.
- Work backwards from the offer. Divide the gratuity offered by your daily basic wage. If the result is 125 days here, the employer has made the same deduction we have. If it is fewer, ask what else was taken off.
The unpaid days reduce service. They do not justify any further reduction — an employer cannot treat a period of approved unpaid leave as a break in continuity that restarts the clock. The years before and after the leave join up; only the leave itself drops out.
Questions
My manager approved the unpaid leave. Surely it still counts?
No. Article 33 requires the employer's approval for unpaid leave in the first place, and Article 33(2) then excludes it from the service term. Approval makes the absence lawful; it does not turn it into service.
Does unpaid leave break my continuity of service?
Approved unpaid leave reduces the length of service but does not, on its own, break continuity. The periods either side are added together.
I was on half-pay sick leave for a month. Does that come off?
No. Half pay is pay. Only the unpaid part of sick leave — after the first 45 days in a year — is excluded.
Related
- The service periodWhat counts and what breaks continuity
- Exactly five yearsHow the two bands meet
- Run your own figureEnter your unpaid days and the calculator deducts them
Figures are for the case described. Published 2026-10-18 and reviewed against Federal Decree-Law No. 33 of 2021. General guidance, not legal advice — see the disclaimer.