With the current outlook of the novel coronavirus pandemic still uncertain at best, thousands of companies in the UAE are now exploring their options on how to move forward in the next few months. This uncertainty is also affecting the majority of the country’s workforce as employees try to figure out their legal rights in this unprecedented situation.
Late last month, Zawya detailed the legal rights of both employers and employees and what action they should take if facing unfair dismissal. Whilst several points still stand, last week the Ministry of Human Resources and Emiratization (MOHRE) issued an update, a Ministerial resolution (no. 279 of 2020) regulating employment in private sector companies during the “period of application of the precautionary measures to contain the spread of COVID-19”.
WHY IT HAS BEEN ISSUED
“Given the unusual circumstances, it is crucial for both employers and employees to join forces to [overcome] this difficult period,” said Michael Kortbawi, Partner at BSA Ahmad Bin Hezeem & Associates. “The MOHRE has set out the framework for mutual effort by issuing a resolution focused on reaching a mutual agreement between both parties.”
He continued: “This will require cooperation and compromise from both parties and will [prevent] employers [from abusing] the provisions of the resolution and the Labour Law by letting go of or imposing detrimental measures upon employees in circumstances where the business has not been affected by the COVID-19 outbreak. [It will also] allow employees to negotiate their rights with their employers and accept compromises for their own benefit and the benefit of the business.”
YOUR LEGAL RIGHTS AS AN EMPLOYER AND EMPLOYEE
Whilst employers are advised to take measures gradually in their order of appearance in the resolution, it is understood from the MOHRE that both parties can agree on a measure without resorting to the preceding one. However, the key term Kortbawi is keen to stress is “mutual agreement”; no employee should be forced or bullied into accepting a decision.
“Through the resolution, the MOHRE has set out a series of measures that an employer can take in order to remedy the fluctuating workload occurring as a result of the COVID-19 outbreak,” he said. “An employer is, however, not able to unilaterally decide and compel their employees to comply with a measure of their choice.”
Per the update, here are the measures in place that an employer is permitted to take in agreement with their employees:
An employer is allowed to have staff work from home
This is already known, and the employer does not require the employee’s consent to impose it.
An employer is allowed to put their employees on paid leave if required at this time “The employee will agree to take their annual leave at a time determined by the employer in order to minimise the establishment’s losses arising from the COVID-19 outbreak,” Kortbawi explained.
An employer is allowed to reduce the salaries of its staff at this time – Although under normal labour circumstances an employer cannot force an employee to take unpaid leave, this has now been changed for the period of the pandemic as this is considered an exceptional circumstance. However, the employee must agree to this and not be forced into it.
For employers, the MOHRE will issue an update soon regarding the use of the Wage Protection Service (WPS) to outline the applicable process for temporary salary reductions.
An employer is not allowed to impose a permanent salary reduction without the MOHRE’s review and approval.
Salary reductions are for these exceptional circumstances only and are not to be imposed permanently.
An employer is only permitted to lay off staff if all of the above options have been exhausted.
Before employers can cut staff, they need to fairly consider all the possibilities available. If no agreement is reached between the two parties involved, only then is it acceptable to lay off the employee. However, this is not classified as a normal redundancy; the employer needs to demonstrate that its company has indeed been affected by the COVID-19 outbreak.
“In circumstances where no mutual agreement is reached, an employer will have the grounds to terminate their employee[s],” Kortbawi explained. “The said employer will be required to pay all dues in accordance with the provisions of the Labour Law [such as notice, leave days, etc.] It is important to note that terminations arising as a result of the failure to reach a mutual agreement are unlikely to be considered abusive dismissals by the Labour Courts as employers will be able to refer to the resolution to justify the termination.”
It should be noted that Points 2 to 5 would need to be formalised in writing to legally stand.
FIND ANOTHER JOB IN THE VIRTUAL LABOUR MARKET
In an attempt to help affected employees, the new resolution states that all employers having extra staff at present should register them in the government’s Virtual Labour Market system.
“A company wishing to hire employees is now required to search for available candidates on this website in order to give outgoing employees priority for the job opportunities available,” explained Kortbawi.
Employers are required to pay their employees’ entitlements, except for basic salary, until the employee either leaves the country when able or is permitted to work for another company. However, employees must be supported until another job is made available.
“Theoretically, it can apply to any employee, on paid or unpaid leave,” Kortbawi continued. “The aim here is to avoid issuing new work visas and avoid importing additional workforce due to the risk; the MOHRE is encouraging companies to use the resources already at hand. This is a temporary solution; visa transfer is on hold across the board. A permanent transfer will mean that the current employer will need to settle ‘end of service’ entitlements as per the law.”
WHAT TO DO IF FACING UNFAIR DISMISSAL
If the above requirements have not been met, then an employee may have the right to take legal action.
“This will depend on the ‘unfair measure’ taken by the employer,” said Kortbawi. “Based on the example of an employer laying off staff, an employee would be able to file proceedings for unfair dismissal. However, the employee would need to demonstrate that they were not given the option to take paid/unpaid leave and/or temporary/permanent salary reduction.”
As of now, the MOHRE has not introduced any resolutions to offer financial or other support to terminated employees; official government sources online should be checked for updates.
It should be noted that the above only applies to non-UAE nationals; a separate resolution has been issued focusing on the employment of Emirati citizens within private sector companies affected by the COVID-19 outbreak.
WHOM IT APPLIES TO
BSA Ahmad Bin Hezeem & Associates has stated that the resolution above applies to “all companies registered in the Ministry” and “affected by the precautionary measures referred to”. Free zone companies and their employees are subject to the rules and regulations of their respective free zone authority; however, most fall under the umbrella of the Federal Labour Law.
This, however, does not apply to Dubai International Financial Centre (DIFC) companies and employees who are subject to DIFC employment law. Nevertheless, “it is likely that the DIFC will follow the direction set out by the MOHRE in the resolution and adopt similar [if not the same] provisions.”
Published by Zawya
Commentary by Partner Michael Kortbawi