UAE Legal Advisor

Good Morning everyone.

My name is Shoeb and I am an Indian qualified lawyer practising law in UAE for 12 years. As we all know that during this Pandemic situation everything has gone for a toss. It has become very tough for the employers and the employees to meet each other’s expectations. So today this video is all about managing the relations between an organization and its employees.

Please note that this information is for general knowledge purposes only. A UAE Legal Advisor should be engaged to get specific legal advice on any matter.

As we already know that companies are struggling with their sales and revenue generation due to this COVID19 situation. So, in this regard, UAE government has acted fast and has brought in a resolution (Ministerial Resolution No. (279) of 2020 concerning the employment stability in establishments of the private sector during the application of precautionary measures to control novel coronavirus outbreak) which will support private companies and will also help in bringing employment stability in the market.

So let’s have a look at these Resolutions. It is very important to note here that these resolutions are only applicable to the companies which satisfy the below two conditions:

  • Mainland UAE Companies; and,
  • Companies affected by preventive measures taken by governmental authorities.

Re-structuring of the “Employer-Employee” relationship. What can Employers do?

The resolution allows the companies to restructure their relationship with the non-national employees gradually as per the order provided by the Ministry of Human Resources and Emiratisation. Here gradually means that the companies must follow the below order issued by the Ministry while restructuring.

1.  Remote Working – If its possible companies should try to implement a remote working system for their employees.

2. Granting paid leaves – Companies can grant paid leaves to the employees and can thus deduct these from the annual leaves of the employees.

3.  Granting unpaid leaves – To manage the overheads of the company the employer can grant unpaid leaves to the employees. But it is very important to note here that this can only be done with the mutual consent of the employer and the employee.

4. Temporary salary reduction – The Ministry has also given employers the right to reduce the salary of his employees for a temporary period. But for this again both the parties shall mutually agree according to the format provided by the ministry which is attached to the resolution as an addendum. This temporary reduction will be applicable until the end of the term mentioned in the addendum or until the applicability of the resolution, whichever is earlier. The addendum should be signed in two (2) original copies; one being in possession of the employees and others should be with the employer.

5. Permanent salary reduction – For this to be done employers must seek employee’s approval as well as the advance consent from the ministry. As this will require changes to be made in the registered employment contract of the employee with the ministry. If the salary is reduced permanently also the employer must carefully consider what effect it will make on the gratuity entitlements of the employee, will the gratuity be calculated on the original salary of the employee or the reduced salary. This needs to be carefully considered by the employer or a lawyer in Dubai needs to be engaged to get proper clarification. 

If within this period the employee is quarantined then no salary can be deducted for this period. This period needs to be deducted from the sick leave entitlement of the employee which is mentioned in the UAE labour law. If the employer wants to terminate the employee then the employer needs to register the employee’s details on the virtual labour portal which is provided by the Ministry of Human Resources and Emiratisation. And also, until the employee finds alternative employment or is able to leave the country the employer is obligated to pay off all of his allowances except the basic salary, for example, Housing Allowance, Transport Allowance and any other allowances mentioned in the contract.

All these arrangements which we have discussed previously is only applicable during the period where the resolution is valid. Now the question arises that until when the resolution is valid, the answer is that we don’t know. The Ministry will notify depending on the situation and when the normalcy cripples back.

This video – covers the topic of employment stability in the private sector during the application of precautionary measures to control the novel coronavirus outbreak.

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Find out what the legal resolution says –