As the 2019 Novel Coronavirus (COVID-19) continues to spread across the globe, businesses are facing weakened financial markets, disruption to workplace operations, and economic uncertainty. We have seen unprecedented measures taken by the UAE to prevent the spread of the disease including mandatory work from home instructions and business shut downs.

However, there has been uncertainty as to what steps an employer can take to mitigate the impact of the virus while protecting the rights of the workforce during this unprecedented time. To address this, the Ministry of Human Resources and Emiratisation (MOHRE) published on 30 March 2020, a new Resolution (279 of 2020) (Resolution). The Resolution provides welcome guidance designed to help employers navigate difficult employment issues arising in connection with the crisis. We have summarised the key elements of the Resolution below.

Who does the Resolution apply to?

The Resolution applies to non-national employees working for private sector companies registered with the MOHRE. However, while the Resolution does not specifically state that it applies to free zone companies, we would expect the spirit of the Resolution to be followed and applied offshore.

Permitted measures to ease financial burden of employment costs on employers

The Resolution permits the “gradual” application of the following steps to be taken with the agreement of the employee:

  • Implementation of a remote working system – Save for those companies which fall within the exempt categories, all companies are currently required to ensure that 70% of their workforce is not working onsite. However, the ability to work from home may not be practical for all roles.
  • Provision of paid leave
  • Provision of unpaid leave
  • Temporary salary reduction – The Resolution allows employers to implement salary reductions. Such reductions must be recorded in a “temporary addendum” to the labour contract. The MOHRE has provided a template temporary addendum document which must be signed by both parties and submitted to the MOHRE upon request. The salary deduction would be removed upon the earlier of: (a) the end of the addendum term; or (b) the expiry of the Resolution.
  • Permanent salary reduction – Permanent salary reductions must be implemented in accordance with the MOHRE’s current salary amendment procedure and require the approval of the MOHRE.

Companies should be able to demonstrate: (a) all alternatives steps have been considered/taken before moving to implement harsher measures; and (b) express employee consent.

Redeployment of excess employees

Employers who have excess employees unable to work should register those employees with the “Virtual Labour Market System”. This is a MOHRE online platform which matches vacancies with suitable candidates. Employers remain required to continue to meet  housing and other employment obligations of registered employees (with the exception of payment of salary) until the employee exits the UAE or is authorised to work for an alternative employer.

Employers looking to onboard new recruits must list the vacancies on the Virtual Labour Market and search the database of registered jobseekers.

In light of the current suspension on the issuance of new work permits, this initiative is a sensible move to ensure that the ability to mobilise in-country talent is maximised in order to efficiently address talent gaps in the market. 

How long will employers and employees be subject to the Resolution?  

The Resolution refers to its terms applying “during the period of applying precautionary measures to control the novel coronavirus outbreak”. It seems that the Resolution is applicable for as long as the COVID-19 procedures are in place. A formal timeframe has not been identified at this time (subject to further government announcements).

For further information, please feel free to contact one of the lawyers below or your usual Baker McKenzie contact.

Author

Joanna Matthews-Taylor is the UAE Head of the Employment practice of Baker McKenzie Habib Al Mulla, based in Dubai. She is experienced in the full spectrum of employment law issues, including recruitment, employment contracts, benefits, protection of confidential information and termination. She has also advised clients on the employment aspects of corporate transactions, cross-border secondments and the mobility of employees in the Middle East.

Author

Omar Momany is the Head of the UAE Corporate/M&A practice of Baker McKenzie Habib Al Mulla, based in Dubai. With over 15 years' experience in the Middle East, Omar focuses on public and private mergers and acquisitions, corporate restructurings, corporate governance, joint ventures, commercial matters and corporate/shareholders' disputes in the UAE and throughout the region.

Author

Hani Naja is a partner in the Corporate & Commercial practice of Baker McKenzie Habib Al Mulla. He has been practicing since 2007 with a focus on M&A, reorganizations and post-acquisition integration as well as corporate structuring in the Middle East, particularly in the UAE and Qatar. Hani also advises on general commercial, corporate governance and compliance matters, and has gained substantive experience in the technology, retail, defense and government sectors.

Author

Jennifer Leader is an associate of Baker McKenzie Habib Al Mulla based in Dubai, specializing on employment law matters for clients based in the UAE and all free zones, including DIFC. Jennifer advises on a full range of employment law issues, including procurement, contract drafting, disciplinary matters, termination, non-competition, and transfer of employees during M&A proceedings.

Author

Mohamed El Khatib is the UAE Head of the Litigation practice of Baker McKenzie Habib Al Mulla, based in Dubai. Mohamed has over 25 years’ experience (including over 17 years in the UAE) in litigation across a number of industries and areas of UAE law including criminal, civil, banking, corporate disputes, real estate, construction and employment.

Author

Tarek Saad is the Head of the Maritime practice at Baker McKenzie Habib Al Mulla, based in Dubai. He is seasoned in maritime and insurance law, with over 22 years' experience in the Middle East, and more than 10 years in the UAE, and is also involved in the drafting and review of the new UAE Maritime Law. Tarek has extensive experience in general litigation including civil, commercial, real estate, criminal, intellectual property and labor litigation in the UAE.

Author

Eman Asad is a senior associate of Baker McKenzie Habib Al Mulla based in Dubai, with over 16 years of litigation experience in the UAE. She specializes in commercial, white collar, employment, maritime, insurance, banking and corporate litigation. Eman has represented clients in cases before the rent committee, public prosecution and at all levels of the UAE courts.

Author

Maye Ismail is an associate in Baker McKenzie Habib Al Mulla based in Dubai, focusing on dispute resolution as well as local arbitration (CRCICA and DIAC). She has experience in the UAE and Egypt in handling employment cases, criminal cases, civil and commercial litigations, including shareholders' disputes, heirs' disputes/estates and rental cases. Maye also provides legal advice on both contentious and non-contentious matters.

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