Employment Rules Resulting From COVID 19 Outbreak

Since the outbreak of coronavirus (Covid-19), all employers are assessing how to best mitigate the impact to its work force employees and workplace.

This has raised important concerns related to UAE employment law for a workforce that is dominated by an expats. With this backdrop, the HR department becomes critical in not only setting guidelines in protecting employees but at the same time support the business performance.

For hard hit companies operating in industries such as hospitality, hotels and  airlines that are directly being affected by the economic downturn / recession, the UAE Labour Law now provides a  degree of flexibility to modify current employee contracts.

Under Resolution No. 279 of 2020 issued by The UAE Ministry of HR rules and Emiratisation states:

That the measures taken to protect the company staff must be agreed upon by employers and non-Emirati employees. The contract can later be renewed mutually by both employee & employer with the mandatory requirement of being issued in two copies. Each party has to be issued their respective contract copies.

Companies registered with the Ministry can take the following actions:

1. Allow work from home
2. Grant paid leave
3. Grant unpaid leave
4. Reduce salaries temporarily
5. Reduce salaries permanently

This resolution is strictly issued for expatriates and is valid till the effect of Covid prevails. It has further been explained that any such decision must be reported to the Ministry for approval before being implemented. Employees that are being deprived of remuneration are allowed to get a housing allowance and other dues, however, the basic salary can be revised as per the contract.

Many companies have been facing difficulties combating Covid effects and have successfully managed to continue operating. A prolonged scenario could place companies under increased stress jeopardising the overall viability of a business. These changes to the UAE Law are designed to provide employers options for the long term sustainability of their business and overall workforce.

Employee Gratuity:

If the salary is reduced for an employee during Covid duration, the gratuity will be calculated in full amount for all the previous years.  Cumulated leaves, overtime, and all the additional dues for one month of every year will be used to calculate the gratuity amount.

The gratuity is calculated on the salary an employee received during the time duration he served within a firm and will be changed from the next years based on the new contract he has with the employer regarding revised salary. New gratuity amount will be calculated based on the new value.

Lastly, no employer is entitled to hold an employee’s passport and will be answerable to MOHRE (Ministry of Human Resource & Emiratisation). All the contracts made between an employee & employer should be honoured and treated with maximum honesty. Any breach of contract may lead to severe consequences by the ministry.

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