Creative Zone Hosts Webinar to Discuss Unpaid Leaves, Work from home and Redundancies in jobs during COVID-19
On 16th of April, Creative Zone organised a live webinar to discuss how COVID-19 is impacting workforce in the UAE and simplify ‘Resolution 279’, introduced by the Ministry of Human Resource and Emiratisation, that aims to provide a set of regulations based on which companies and employees are to conduct themselves. The session was moderated by Lorenzo Jooris, CEO, Creative Zone and the speaker was Luke Tapp, Head of Pinsent Masons Middle East Employment Practice.
The one-hour long session touched upon several critical topics like redundancy in jobs, working remotely, the rules for paid/unpaid leaves, layoffs and many other key concerns that are taking rounds. The session began by Tapp explaining what the Resolution 279 entails in practical terms. The key features of the Resolution are-
Working From Home
Barring the obvious Industries that are exempt from the lockdown, all other businesses are to operate remotely.
The government body also added that all public and private sector employees whose work does not require them to be in the office must work from home.
In accordance with Federal Law No. 8 of 1980 (Labour Law), employers may specify the dates on which employees are to utilise their annual leave, without the need for employee consent. Employers will also need to consider the practical effects of requiring employees to utilise their annual leaves, as it could result in employees not having enough accrued leave remaining should they wish to visit families overseas once travel restrictions relating to COVID-19 are lifted.
The Resolution allows employers to mutually agree a period of unpaid leave with employees. This is a welcome introduction for employers, as unpaid leave is not expressly recognised under the Labour Law and so implementing it previously carried a degree of uncertainty.
There is also no cap on the duration of unpaid leaves and it is not mandatory to exhaust ones paid leaves to be put on unpaid leaves, all you need is employee consent.
Employers may wish to utilise this option as an alternative to dismissals. One advantage of doing so is that an employee who remains sponsored will retain medical insurance while in the territory (and they may be unable to leave the UAE due to current travel restrictions).
While COVID-19 will be dealt with on an emergency basis along with any other critical needs it is important to consider the provision of basic medical care. The option of unpaid leave may be preferable to dismissals in many instances.
Temporary reduction of salary
The Resolution states that employers may reduce salary temporarily, with employee consent, and outline a process which employers must follow to lawfully implement such a change.
Specifically, the parties must enter into an official temporary addendum to the MOHRE employment contract, with both parties retaining a copy and the employer prepared to submit it to MOHRE on request.
The terms of the addendum should provide for its expiry either (a) at the end of a specified term, or (b) when the Resolution itself ceases to be enforced (whichever comes first). If the employer wishes to renew the addendum prior to its expiration date, this can be done with the express consent of the employee.
The introduction of the Resolution, and its express references to unpaid leave and temporary salary reductions, will provide comfort to employers who may have been cautious about implementing such measures due to the risk of penalties being imposed by the Wage Protection System in the event that wages paid to employees did not match amounts as stipulated on registered MOHRE contracts.
In our view, provided that employers follow the guidelines as outlined in the Resolution, we do not anticipate any such issues.
Permanent reduction of salary
Where employers wish to permanently reduce salary, the Resolution states that such a reduction must be consented to by the affected employee(s) and can only be implemented by the employer applying to MOHRE to have the MOHRE employment contract officially amended.
The Resolution provides procedural guidance to protect employees in circumstances where the employer identifies a surplus of non-national workers.
Significantly, the Resolution provides that the employer must continue to provide the outgoing employees’ housing and all of their entitlements (save for their basic salary) until the earlier of the individual exiting the UAE or obtaining the necessary authorization to work for another establishment (or the repeal of the Resolution upon the precautionary COVID-19 measures being removed). This is a material development and will act as a disincentive for employers when considering whether to reduce headcount.
In such circumstances, the employer is required to offer outgoing employees the option of registering their details on the MOHRE’s portal for job seekers known as the ‘Virtual Labour Market System’s. Accordingly, these employees can be rotated and utilised by other establishments seeking to hire candidates within the UAE given the suspension of foreign recruitment. These employees can then be hired and authorization obtained electronically for the necessary work permits (work transfer permit to the new employer, temporary work permit or part-time work permit).
The Resolution does not explicitly provide that employers can dismiss employees because of redundancy without compensation being payable. However, the recognition of the concept of redundancy within the Resolution (given the lack of recognition of this concept by the UAE authorities to date) may be an indication that the UAE Labour Courts may be more sympathetic to employers implementing redundancy dismissals (during the crisis) than it has viewed redundancy dismissals previously.
If a person serving hisher probation period is asked go on leave (Annual, Unpaid or Paid) the probation cannot be extended in any case as maximum probation period by law is 6 months. If you are made redundant due to COVID-19 then your employer is still legally obliged to pay your allowances until you find another job or till you can be repatriated to your home country.
Companies hiring should ideally postpone the starting date and get legal advice before retracting an offer letter.
Such employers are directed by the Resolution to:
- List all available jobs on the Virtual Labour Market and search through registered jobseekers when looking to fill any positions
- Obtain work permissions electronically where a suitable candidate is identified, by applying to MOHRE.
In addition to the above considerations, employers should also be aware that Federal Law No. 14 of 2014 on the Control of Communicable Diseases has recently been amended such that COVID-19 has been added to the list of communicable diseases.
As such, the following individuals are required to notify the Ministry of Health immediately where they know or suspect the infection of any person with COVID-19:
any adult person in contact with the individual; and
the direct superior in the place of business of the individual.
The penalty for non-compliance with this provision according to the law is imprisonment and / or a fine not exceeding AED10,000.