Annual Air Ticket - UAE

Dear fellow HR professionals,

When I joined as HR director earlier in the year, I had a number of concerns/complaints from employees about the mode of how they receive their annual leave air ticket. We provide a "ticket" for employees and legal dependents residing in the country. I would like to introduce a cash entitlement for all expat employees in the Middle East. This would reduce the burden on administration to facilitate this process and help in correct costing and accrual in Finance. Please share your thoughts on the practice implemented in your company in the UAE.

Thanks and Regards,
Ashwita Dmello

But the problem is determining the cost of the ticket as air tickets fluctuate from time to time. Some employees may be due to getting the air tickets in-season and some in the off-season. How will you arrive at the uniform cost for cash entitlement in lieu of tickets?

Pon

Hi All,

Many companies now prefer outsourcing to alleviate the burden on Administration. Does anyone have an idea about the basis for calculating this?

Kind regards,

Hi!

Providing cash, instead of tickets, will indeed unburden the Admin Department from the hassles and costs of personnel who will coordinate/implement the bookings and ticketing arrangements for employees and their dependents in a company, especially if the employee population runs into thousands. I have seen organizations that maintain a unit with many employees simply doing this year on year.

Providing cash is the simplest and most cost-effective strategy. Estimate the cost based on the average cost of travel tickets from the country of work to the main airport of the country where the employee comes from. Provide each employee with the equivalent cash relative to their entitlement, including their dependents at the beginning of each year, to provide them the flexibility of booking early and during their approved annual vacation leave as discussed and approved by their respective department managers/supervisors. Create a policy on this matter specifying the change in the arrangement and its terms and conditions. Make it clear that differences between actual air ticket costs and the provided allowance will not be refunded by the company and that booking timings shall be the responsibility of all employees. As a matter of service, the company can invite a good travel agent to set up a small office on the company's premises to facilitate employee travel arrangements. Discounts can also be negotiated, especially if the travel agency can get an exclusive arrangement with them.

I can help you develop the policies and set up of the arrangement on this matter. Contact me if you need professional help in this area.

Best regards,

Ed Llarena, Jr.

Managing Partner

Emilla International Consulting Services

Dear Ed,

Thank you for your explanations. However, in the case of Filipinos as an example, ticket prices double in peak season. Considering that they will all request to be paid at peak season rates, this makes the process not cost-effective.

Regards,
B.O

Hi!

Benefits which are not defined specifically and/or mandated by law (with minimums) must be considered discretionary and the prerogative of the company. Hence, to say that employees, regardless of their nationality, will demand that they be paid the price of tickets during peak season is absurd and nonsense.

Employees (even unions) have no business making demands on amounts or types of benefits unless it has been approved, enunciated, and announced by the company. The determination of rates is largely the prerogative of top management because of their impact on the company's financial situation year on year.

A very big financial institution in KSA provides a cash allowance for the air tickets of their employees based on the lowest-priced round-trip ticket of a certain airline. It is accepted, and employees clearly know the rules. If they book and travel only during peak season (or travel via business class), that's their own lookout and cost because the allowance will not suffice for the price of round-trip economy class air tickets during the peak season. They will have to pay the price difference from their own money. Employees do that without complaints. They can also save the money if they decide to cancel their travel for that year.

However, the given amount is actually a little more than the price of a round-trip ticket (economy) if the employee can book early and/or travel during the non-peak season.

Best regards,

Ed Llarena, Jr.

Managing Partner

Emilla International Consulting Services