Amidst unprecedented times, arising from the global pandemic, causing uncertainty in the near future and the lack of clarity in the existing laws to handle such a situation, the Ministry of Human Resources and Emiratization ("MoHRE") has been quick to react by issuing a resolution which came into effect on 26th March, 2020 (the "Resolution"). The purpose of this Resolution is to regulate employment relationships in the UAE's private sector during this period and to this effect the Resolution draws the clarity needed.
In an effort to help businesses in the UAE restructure and reevaluate their contractual obligations with their foreign or expat employees, private sector entities affected by Covid-19 can gradually adopt the steps stipulated in the Resolution, in agreement with their employees. These measures include reduction in salaries of employees temporarily or permanently, implementing a virtual work from home system or sending them on paid or unpaid leave.
Article 5 of the Resolution stipulates that entities seeking to temporarily reduce an employee's pay during this period can do so but must adhere to the following:
- Draft and sign a temporary annex to the employment contract in the format prepared by the MOHRE which shall end when its date expires or when the Resolution is no longer applicable, whichever is earlier;
- Renewal of the aforementioned annex to the employment contract, if needed, by mutual agreement of both parties; and
- This annex to the employment contract is to be prepared in two copies, one copy held by each of the parties and the employer shall present this annex should it be requested to do so by the MOHRE.
Article 6 of the Resolution stipulates that entities wishing to permanently reduce the salaries of its employees must apply for an amendment to the employment contract (format is the standard MOHRE application) to obtain the MOHRE's approval for such a reduction.
Companies with a surplus of employees on its sponsorship may, as per article 3 of the Resolution, register such employees' details in the MOHRE's virtual job market hub for their utilization by other companies should the need arise. The requirement remains on their current employer to maintain their accommodation and other dues, but not their salaries, until such employees leave the country or are granted work in another entity.
The Resolution further states that individuals in the UAE who wish to seek job opportunities may register their details on the MOHRE's virtual job market hub and apply for the jobs offered by the registered companies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.