Employment update in the United Arab Emirates

Introduction

The UAE Ministry of Human Resources and Emiratisation (the “Ministry”) on Thursday, March 26, 2020, issued Ministerial Decision No. 279 of 2020, the title of which translates as “Decision Concerning Employment Stability in Private Sector Establishments During the Implementation Period of the Precautionary Measures to Limit the Spread of the Novel Coronavirus” (the “Decision”). The Decision took effect on the date it was issued (i.e. March 26, 2020).

Application

The Decision applies to all companies and establishments registered with the Ministry, and was issued to “safeguard both employers and non-UAE national (expatriate) employees during the period in which precautionary measures are being taken”. Article 8 of the Decision states that it applies only to non-UAE nationals during the implementation period of the precautionary measures referred to in the Decision.

The Decision does not define the “precautionary measures” being taken nor the “ implementation period” referred to in the Decision.

Amendments to work arrangements

Article 2 of the Decision allows companies that are “affected” by the “precautionary measures”, and wish to “restructure” their labour force to:

1. Regulate how employees work remotely
2. Grant employees paid leave
3. Grant employees unpaid leave
4. Reduce employees’ wages temporarily during the “implementation period”
5. Reduce employees’ wages on a permanent basis

Consistent with Article 60 of the Federal Law No. 8 of 1980 as amended (the UAE Labour Law), Article 2 does not allow employers to take any of the above actions on a unilateral basis (i.e. the above actions can only be taken in agreement with the employee subject to them).

The Decision does not stipulate whether the above actions can be applied cumulatively or are mutually exclusive of one another, who determines whether or not a company has been “affected” by the “precautionary measures” being taken and whether or not a company can avail itself of any of the relief measures. One would, however, expect that businesses within certain harder-hit industries (such as hospitality and leisure) will be able to take advantage of the relief measures.

Reducing employees’ wages

Article 5 of the Decision states that establishments that wish to reduce the wages of their non-UAE national employees must enter into a “temporary additional appendix” to their current contracts with the employee, in the form attached to the Decision. The temporary appendix terminates at the end of its term or the Decision being repealed, whichever comes first. An employer may be required to submit a copy of the temporary appendix to the Ministry if requested to do so by the Ministry.

Virtual labour market

Article 3 of the Decision obliges companies with a “surplus” of non-UAE national employees to register those employees on the Ministry’s Virtual Labour Market (https://mohre.hyrdd.com/) in order for them to work for other establishments that may require additional workers during this period. Article 3 expressly provides that the rights of these employees (such as the right to housing) will continue to be the liability of the ‘offering’ employer, except for the payment of wages (which will be the liability of the ‘hosting’ employer).

Article 4 obliges businesses that wish to hire non-UAE national employees during the period in which foreign nationals are unable to enter the UAE for work (i.e. non-current residents of the UAE) to post vacancies on the Ministry’s Virtual Labour Market and hire employees listed there by other companies subject to their requirements. In parallel, and through the Ministry’s Virtual Labour Market platform, Article 7 of the Decision provides potentially redundant employees with a transparent way in which to seek alternative employment.

While the Decision leaves certain matters open to interpretation (including the question who would be entitled to claim the reliefs set out in the Decision itself), it is apparent that the Minister of Human Resources and Emiratisation has issued the Decision to provide an expeditious and practical form of relief to employers in these challenging times, whilst also protecting non-UAE national employees from any unilateral actions being taken by employers.

How we can help?

Norton Rose Fulbright lawyers are well-versed in the laws of the UAE, and are available to advise on amendments to employers’ employment contracts, handbooks and policy documents. Please see the contacts below.