Business integrity in the time of pandemic: what can businesses in the UAE do to protect their people and business?
During these uniquely challenging times, businesses are poised to react to sudden changes in the market. As businesses navigate through new waters, it is best to seek guidance from the authorities and methodically deal with issues that arise.
The Ministry of Human Resources & Emiratization (MOHRE) has issued Ministerial Resolution No. (279) of 2020 on Employment Stability in Private Sector during the Application of Precautionary Measures to Curb the Spread of Novel Coronavirus (the “Resolution 279”). Resolution 279 came into effect on 26 March 2020, its date of issuance, and shall remain effective during the period of application of precautionary measures to curb the spread of COVID-19. It seeks to promote employment stability and to protect the interests of both employers and non-national workers.
Article 2 of the Resolution 279 provides that establishments affected by the precautionary measures and wishing to reorganize shall progressively proceed, in agreement with the non-national employees, as follows:
- Implement remote working system;
- Grant paid leave;
- Grant unpaid leave;
- Temporary salary deduction during the referenced period;
- Permanent salary deduction
Questions about the progressive application of the above-listed actions have arisen. Being a recent issuance, interpretations may vary. However, the overarching requirement in the implementation of any of these actions is mutual agreement or consent.
The first two actions on the list are not controversial. MOHRE Ministerial Resolution No. (281) of 2020 Regulating the Remote Work in Private Establishments during the Period of Application of Precautionary Measures to Curb the Spread of Novel Coronavirus with the annexed Temporary Guide has been issued on 29 March 2020. Article 76 of Federal Law No. (8) of 1980 or the UAE Labour Law already gives the right to employers to fix the date of annual leave.
For the last three actions, businesses must be careful not to overstep the protected rights of employees by faithfully complying with requirements set by the authorities. It cannot be overemphasized that consent from employees must be given knowingly and voluntarily. For the temporary salary deduction, MOHRE has provided a template for a temporary supplement to the employment contract. Such a temporary supplement to an employment contract shall be effective for the agreed effectivity period or for as long as Resolution 279 is in effect, whichever is earlier. Also, employers must provide the employee with an executed copy of the temporary supplement and must provide a copy to MOHRE when requested.
For permanent salary deduction, employment contract details may be amended with MOHRE’s approval. The procedures are in the process of being updated, but if the existing data modification service for employers will apply, the minimum condition requires that the establishment status is private, the establishment license is valid and updated, and the original e-signature card of an authorized partner/owner is available. The establishment number, number of work card, the details of change in salary, allowances, and conditions, employee’s valid passport and residence visa, photo of the employee, and copy of the old contract should also be kept on hand. We will be monitoring updates on the procedures.
Article 3 of Resolution 279 recognizes surplus in non-national workers or redundancy brought about by the implementation of precautionary measures. Hence, affected businesses can register the information of their redundant employees on the Virtual Labor Market (careers.mohre.gov.ae) so they can be recruited by other companies. Please note that despite the acknowledgment of redundancy, employers remain obligated to provide accommodation and payment of all entitlements (except for wages) until the employee leaves the UAE or is able to obtain a new work permit to transfer to another employer. The Virtual Labor Market also facilitates the pooling of available talent or labor in the UAE while supply of overseas labor has been interrupted.
As emerging measures are being introduced, it is becoming clearer that the synergy between businesses and people is more desirable than ever. Authorities have provided businesses and employees with avenues to explore and balance their respective interests. A changing legal landscape presents an opportunity for businesses to review their policies and processes, including company employment policies and human resource management.
Should you have any inquiries related to your business’s employees, or wish to discuss the impact of COVID19 on your employment contracts, please get in touch with Lailani Manalastas on +971 4321 1000 or by email at Lailani@alsuwaidi.ae