Minimum Annual Leave Entitlement

Article 78 of the Labour Law states that after completing at least 6 months of employment, a worker is entitled to paid annual leave for no less than 30 (thirty) days. Taking into consideration the interest of work, this annual leave may be divided, combined, or deferred for a later date.

It is important to note that the annual leave balance is distinct from weekly rest days, official holidays, special leave, and sick leave, which are separately regulated under article 79 to 83 of the Labour Law.

The employment contract may grant more annual leave days than the statutory minimum but cannot provide fewer than the law requires, as any agreement reducing this entitlement would be void under article 3 of the Labour Law.

The timing of the annual leave is generally agreed upon between the employer and the employee, taking into account operational requirement. While employers may organise leave schedules to ensure the continuity of business operation, they cannot unreasonably prevent employees from taking their entitled leave.

Carry-over and Postponement

As a general principle under Labour Law, annual leave should be taken within the year in which it accrues. However, article 78 of the Labour Law stipulates that a worker who does not utilise his annual leave has the right to retain the leave for a balance not exceeding 30 days.

Article 81 of the Labour Law also stipulates that the employer may postpone the annual leave of the worker if the interest of the work so requires for a period not exceeding six months.

Compensation Principles for Annual Leave

According to article 81 of the law, the employer may pay the worker the basic wage for the days of annual leave that he does not take, if the worker agrees to this in writing. The worker is also entitled to the gross wage for his annual leave balance if his service ends before exhausting it.

Practical Tips for Managing Annual Leave

Proper management of annual leave is essential to avoid disputes and ensure smooth workplace operations. In practice, many issues arise not from the law itself, but from poor planning or unclear processes. The following practical steps can help employers manage annual leave effectively and prevent common problems:

• Plan leave in advance: Employers should establish a clear leave policy and maintain a system to track leave balances, ensuring entitlements are properly monitored and recorded.
• Balance business needs with fairness: While operational requirements may influence leave timing, employees should not be unreasonably prevented from taking their annual leave.
• Monitor carry-over and postponement: Annual leave should generally be taken in the year it accrues, any postponement or carry-over should be limited and clearly documented.
• Communicate decisions clearly: Leave approvals, postponements, or recalls should be confirmed in writing to avoid misunderstandings.

These practices minimise disruptions, uphold employee satisfaction, and reduce legal risks.

It is highly recommended for all employers and employees to make themselves familiar with the leave related provisions of the Labour Law, which is available in full in English on the link below:

Written by:

Yasmeen Al-Habsi

Yasmeen is a legal intern at Decree. She has previously interned in the Government of the Sultanate of Oman as well as in a local law firm. She is interested in corporate law. She holds an LLB from Leeds Beckett University.