27 May 2020

DIFC Employment Law Update – Presidential Directive on COVID-19

27 May 2020

The recent DIFC Directive (No.4 of 2020) is intended to be in force until 31 July 2020 and is subject to extension (the “Emergency Period”). The DIFC Directive supersedes all other DIFC regulations during this Emergency Period.

We summarise the key measures and provisions below.

Flexibility Provisions

Heretofore, under the current DIFC Employment Law, employee consent is required for employers to impose various measures, such as reduced working hours, reduced salaries and forced unpaid leave. However, the new DIFC Directive permits employers to impose any of the following six measures with five (5) days’ written notice and without employee consent:

  1. reduced working hours;
  2. forced annual leave (this was permitted without consent, in any event);
  3. forced unpaid leave;
  4. reduced salary on a temporary basis;
  5. restricted workplace access; and
  6. remote working conditions.

These Emergency Measures are similar to those introduced by the UAE Government on 26 March 2020 by Ministerial Decision No.279/2020 (see our article here). Under Ministerial Decision No.279/2020, employers must have suffered actual losses or expect losses to be incurred before imposing measures on employees. This is not the case under the DIFC Directive. No threshold is required.

Sick Leave Provisions

  • Any sick leave taken as a consequence of having contracted COVID-19 or for being placed in quarantine by a competent UAE authority will not be counted towards an employee’s statutory sick leave entitlement (refer to our article on DIFC Employment Law here);
  • Employees will also be entitled to full pay during any COVID-19 sick leave period provided the employee can provide a sick leave certificate issued by a competent UAE authority. The DIFC Directive also confirms that an employer cannot impose any of the abovementioned emergency measures on employees during their COVID-19-related sick period.

Visa Permits

  • Employers may defer the cancellation of the residency visas and/or sponsorship of terminated employees during the Emergency Period, provided the employer continues to provide basic medical insurance to the terminated employees;
  • If an employer in the retail, service or hospitality sector provides accommodation to an employee, the provision of this accommodation must continue until the visa is cancelled.

DIFC Available Employee Database

  • Similar to the Virtual Labour Market introduced by the UAE Government (view our article on Virtual Labour Market here), all DIFC employers must maintain a list of employees during the Emergency Period. The list will include all employees that have been terminated since 1 March 2020 and any other employees that are surplus to its current needs. DIFC employers wishing to employ new employees may search the DIFC database for suitable candidates.

Contact Us

We are currently assisting clients across the UAE concerning business contingency plans and are advising both employers and employees on all employment-related aspects of COVID-19.

Should you require any assistance in navigating employment issues during the current crisis, please contact us at covidqa@adglegal.com.

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