Reed Smith Client Alerts

The outbreak of COVID-19 has caused unforeseen and unprecedented business challenges to many companies around the globe. Employers are grappling with how to manage their employment relationships within the confines of the law while ensuring the continuity of their businesses.

In an attempt to address the uncertainties caused by COVID-19 , the UAE Ministry of Human Resources and Emiratization (the Ministry) has recently published two resolutions which provide guidance on how UAE employers in the private sector can mitigate the impact of the virus while protecting the rights of their workforce during this period.

Abu Dhabi

The first resolution, Ministerial Resolution No. 279 of 2020 on Employment Stability in the Private Sector (Resolution 279), addresses redundancies and steps that businesses can take to modify existing employment arrangements in the interests of protecting non-UAE national employees while preserving business viability.

The second resolution, Ministerial Resolution No. 281 of 2020 on Regulation of Remote Working (Resolution 281), addresses the requirement for employers to implement homeworking policies and guidelines that employers and employees must comply with.

As many companies are now restructuring their businesses, these interim measures introduced by the Ministry should be considered by management when determining what steps to take.

To assist in this process, we highlight the key provisions of both resolutions below.

Resolution 279

Who does Resolution 279 apply to?

Private sector employers in the UAE that have been impacted by the precautionary measures taken to limit the spread of the virus, and the non-UAE nationals in their employment.

The resolution does not apply to employers and employees in free zones which have their own employment laws and own courts (i.e. the DIFC and ADGM).

What does Resolution 279 state?

Resolution 279 encourages employers to consider alternative ways of reducing labour costs rather than resorting to laying off employees.

It allows employers to restructure their contractual relationship with employees by “gradually” adopting the following measures, in agreement with employees:

  1. implementing a homeworking policy and requiring employees to work remotely;
  2. placing employees on paid leave;
  3. placing employees on unpaid leave;
  4. temporarily reducing employees’ salaries; and
  5. permanently reducing employees’ salaries.

Companies should be able to demonstrate that all alternative steps have been considered before moving to implement more forceful measures. Further, the Resolution makes clear that employers must obtain the employee’s express written agreement before imposing any of measures 3, 4, and 5 above.