Effective from March 26, 2020, the United Arab Emirates (UAE) Ministry of Human Resources and Emiratisation (MOHRE) issued a new Ministerial Resolution No.279 of 2020 (Resolution). The update Resolution contains guidance to support UAE mainland employers regarding employment-related measures they can take in response to COVID-19.
The Resolution has been updated to adjust to the current climate. It is designed to provide direction and options that are legally available to onshore employers. There are effective sanction measures that an employer might be looking to apply (if they have not already). The Resolution applies to all onshore employers regulated by MOHRE. At this stage free zone companies in the UAE are not included however, it could be possible that it may apply in the future. The provisions of the Resolution are applicable only to non-national employees.
We take a closer look at the Resolution and how it will relate to businesses. The wording of the Resolution states that the measures must be carried out “gradually”. Currently it is unclear whether these measures need to put into practice in the order they appear and are set out within the Resolution.
With the attempt to reduce the spread of COVID-19 all onshore companies may implement a remote working system. Under Ministerial Resolution No. 281 of 2020 includes guidance for employers and employees on how the remote working system is to be put into practice. Working from home can be tricky for many employees as it is a new way of working and requires a certain degree of order and structure. We recommend setting a regular morning video conference call such as Zoom and to list the priority of tasks to be completed with clearly defined deadlines. Have regular check in / updates around noon and early afternoon to brainstorm, trouble shoot and ensure employees are on the right page. Create messaging groups for each department within the business, this is a great tool to provide employees support or for a Q&A session at certain parts of the day.
As per UAE Labour Law and in relation to the new Resolution, employers may list the dates in which an employee can utilise their annual leave, without the approval from the employee. This measure may be utilized by an employer however, it will call for “agreement”.
All employers should consider the workable effects of requiring employees to use their annual leave now or over the coming weeks whilst business is most likely to be quieter this month and coming up to Ramadan. As a result, employees may not have enough accrued leave left over should they wish to suddenly travel and visit families overseas once travel limitations relating to COVID-19 are removed.
Under the Resolution it permits onshore employers to commonly agree a period of unpaid leave with its employees. Previously unpaid leave was not clearly recognized under Labour Law and therefore, the introduction of this measure brings a certain degree of relief. Such employers might opt for this option as opposed to dismissal. This also benefits the employee as they will remain under the current sponsorship and will retain medical insurance whilst in the territory. However, they may be unable to leave the UAE for some time due to the current travel restrictions. Should an employer opt for this option we recommend having a discussion with your team as soon as possible.
This measure provides an employer guidance should they opt to temporarily reduce an employee’s salary, with the employee’s consent. All employers must lawfully follow the correct process to fulfil this change.
Both parties the employer and employee must enter an official temporary addendum to the MOHRE employment contract. Each party must keep a copy and the employer is prepared to submit it to MOHRE on request.
The detailed terms of the addendum must specify the expiry as either:
If the employer wants to renew the addendum before its expiry date, this can also be completed with the express consent of the employee.
The Resolution will bring about a certain degree of comfort to certain employers that may have been cautious to implement such measures. Other employers perhaps might have been concerned about the risk of obtaining penalties by the Wage Protection System in the instance that wages paid to its employees did not match the amounts detailed within the registered MOHRE contracts.
It should be noted that with a reduction in the salary there is not an automatic reduction in the number of working hours. We recommend that employers have a discussion with employees and ensure senior management are clear on the working processes. Employers, it is your business and employees are the life blood of your business to help you ride out this period. Employers need to ensure senior managers are on top of their game, productivity does not slip, an excellent service level is provided to your clients or customers, good quality of work is produced, deadlines are met, problems are solved and tasks are completed. Furthermore, if an employee is not as busy during this time it is recommended to start training this employee in other areas of your business and provide assistance to those employees that may have more of a work load to share this amongst the team. Some employers are taking advantage by signing up employees for many free on-line training programmes when they are not as busy. This can help the employee with their career development and learn valuable new skills to support your business and service offerings.
Should employers want to permanently reduce an employee salary, the Resolution confirms that a permanent reduction must be consented to by the affected employee(s). The permanent reduction of salary can only be implemented by the employer by applying to MOHRE to have the MOHRE employee contract officially amended and completed with the salary details.
Under this Resolution the list of measures does not effectively include redundancies. The Resolution provides support and direction in circumstances where an onshore employer identifies a surplus of non-national employees. Should an employer find themselves in this position the Resolution states that such an employee must be offered the option for registering their details on MOHRE’s portal for jobseekers > Virtual Labour Market where they can search for alternative employment. At the same time employers are to continue to honour existing obligations relating to accommodation and all other entitlements (apart from the salary) until either the employee leaves the UAE, or the employee finds alternative employment.
It is yet to be clarified if this relates to the continued provision of housing allowance where an employer does not provide accommodation. We assume this will be consistent with the essence of the Resolution which seeks to ensure employees basic needs are covered if they are in the UAE without work.
Time will tell as to whether the measures introduced by the Resolution may include leniency that might be adopted by the authorities in relation to terminations occurring during the current situation.
For those onshore employers looking to recruit staff are directed by the Resolution to:
Please let us know if you wish to discuss any of the issues listed measures under the Resolution. Our seasoned professionals are currently assisting clients in regard to business continuity plans, advising on cash flow management, supply chain management, tax and accounting, restructuring options, change of local sponsorship to reduce costs and mitigate risk, outsourcing PRO and Human Resources services and advising on strategies bespoke for your business. Contact us on [email protected] or call +971 4 878 6240 for your FREE expert consultation.
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