COVID-19 Employment Law Update: Common Questions Answered for the UAE
06 Apr 2020

COVID-19 Employment Law Update: Common Questions Answered for the UAE

06 Apr 2020

We have been receiving a flood of employment-related enquiries since the outbreak of COVID-19, and the situation is changing almost on a daily basis. We have set out below our answers to some of the most frequent questions we have been asked.

  1. What are the employer’s obligations with regards to the safety of their employees?
  • Employers operating under the UAE Labour Law, DIFC and ADGM laws must provide their employees with ‘adequate means of protection’ and must ensure the health, safety and welfare of their employees.
  • To control the spread of the virus, we recommend employers to carry out risk assessments and take precautionary measures, such as holding educational seminars and actively encouraging their employees to work from home.
  • We also recommend employers to circulate up-to-date information on best hygiene practice and provide any equipment to facilitate this, such as hand sanitizers and facemasks.

 

  1. Can employees be terminated due to COVID-19?
  • In our experience, UAE Courts will only consider termination to be valid if a) the employee is guilty of one of the specified violations listed in Article 120 (which, amongst others, includes violations such as disobeying safety instructions issued by an employer, defaulting on the terms of the employment contract, and revealing any confidential information to competitors) of the UAE Labour Law or b) if the employer has documentary evidence to prove the employee is a poor performer.
  • Therefore, termination merely due to COVID-19 itself will be considered arbitrary (and therefore unlawful) under Article 122 of the UAE Labour law, as it does not relate to the employee’s work performance. However, since many businesses are currently facing financial difficulties, it is unclear whether courts will consider termination due to economic or financial downturn to be a valid reason for termination. We will have to wait and see how the courts deliberate on this.
  • In addition, on 26 March, the UAE issued a resolution (Ministerial Decision No. 279/2020 (the Resolution)) for all private sector employers to register their employees on the Virtual Labour Market (VLM) which enables jobseekers to search for jobs in the UAE. More information on VLM can be found here.
  • Furthermore, employers will need to settle their employee’s dues as outlined in the relevant law and employment contract before finalising their termination.
  • Comparably, DIFC and ADGM laws allow employers to terminate employment contracts without cause if they provide sufficient notice. The notice period may vary depending on the terms of the employment contract.

 

  1. Does an employee have the right to work from home?
  • The UAE’s recent decisions to enforce strict measures to contain the spread of COVID-19 on a 24/7 basis means that only employees that work in certain sectors will be permitted to attend the workplace (Exempted Sectors). Some of the vital Exempted Sectors are healthcare, telecommunications, media and banking & finance (a full list of the Exempted Sectors can be found here).
  • Unless an employee works in one of the Exempted Sectors, they must work from home.
  • Employers (that fall under the list of Exempted Sectors) can decide which of their employees attend the workplace. However, there are guidelines for employees to prioritise working from home (e.g. pregnant women, older employees, and employees with chronic diseases).

 

  1. Can an employee be forced to take their paid annual leave?
  • Yes, provided employees have enough leave balance available.
  • UAE Labour Law, DIFC and ADGM laws employers have the right to compel employees to take annual leave and determine the date of its commencement.
  • DIFC and ADGM require employers to give 7-days’ notice before doing so. This is not a requirement under the UAE Labour Law.

 

  1. What happens if an employee is infected or becomes ill?
  • As per the UAE Labour Law, DIFC and ADGM laws, COVID-19 will be treated in the same manner as any other sickness, in terms of payment.
  • The Labour Law stipulates that an employee is entitled to 90 calendar days of sick leave. The first 15 days are payable at full pay, the next 30 at half pay and the remaining 45 days are unpaid.
  • DIFC and ADGM laws provide employees with a maximum of 60 business days of sick leave. The first 10 days are payable in full, the next 20 days half pay and the remaining days as unpaid.
  • While these are minimum requirements under each of the jurisdictions, an employer may provide more generous entitlements.

 

  1. Can employers compel employees to take unpaid leave?
  • The UAE’s recently issued Resolution (279/2020) gives employers effected by COVID-19 the option to take the following gradual steps as precautionary measures, in their respective order:
  1. Working remotely
  2. Paid annual leave
  3. Unpaid leave
  4. Temporary salary reduction
  5. Permanent salary reduction (approval required from the Ministry in accordance with the normal procedures)
  • As discussed in Q3, employees that do not fall under the list of Exempted Sectors are required to work from home.
  • Furthermore, the Resolution applies only to non-UAE national employees and is applicable only during the duration for which the precautionary measures are in place in the UAE. It is also applicable only to onshore companies who are subject to the MOHRE regulations.
  • The newly issued Resolution does not provide any guidelines for the duration of unpaid leave. Therefore, our advice to employers is to try to minimise the impact on employees as much as possible. We recommend employers to place their employees on unpaid leave, only if they are actually facing losses and not just decrease in profits.

 

  1. Can an employer make salary reductions?
  • The UAE’s recent Resolution affirms that employers who wish to temporarily reduce salaries during the period of precautionary measures may draft a “temporary supplement” to the employee’s employment contract. More information on this can be accessed here.
  • If the employer wishes to introduce permanent salary reductions, it must obtain permission from the Ministry. This step must only be taken if all the other four steps (as mentioned in Q6) have been exhausted and in accordance with the normal rules of changing labour contracts.
  • DIFC and ADGM employers need to consider that non-payment of salary may result in the penalties specified under respective employment laws, which may be severe.

Final Comments

Employers need to be careful to strike the correct balance between protecting its workforce and business continuity, while simultaneously preventing undue panic.

The key takeaways are:

  1. There should be regular and consistent communication in place between employers and employees and employers should ensure employees understand the rules as they are evolving.
  2. The employer must continue to undertake risk assessments on an ongoing basis to both minimise the spread of the virus and ensure the smooth functioning of the business.
  3. Employees should review their employment contracts to be mindful of its provisions in the event they are terminated or placed on sick/annual leaves.
  4. Employers need to be aware of the restrictions on their ability to reduce salaries, force leave and to terminate employees.

To assist clients to navigate this crisis, we have set up a Special Purpose Hub enabling clients and potential clients to contact a member of the team to obtain preliminary or in-depth advice. Enquiries can be sent to covidqa@adglegal.com

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