Note: THIS IS APPLICABLE FOR UAE COMPANIES THAT FALL UNDER THE APPLICATION OF THE FEDERAL LAW 8 0f 1980 AS AMENDED. GOVERNMENT ENTITIES ARE THEREFORE EXCLUDED.

Can the employer oblige the employees to come to work during the Coronavirus pandemic?

Whereas it is difficult to issue a clear answer to the question due to dependency on an array of variables, few considerations are detailed below.

Under the UAE Federal Law no. 8 of 1980 as amended (the Employment Law), the employer has an overarching obligation to ensure safety in the workplace for the employees. The employer’s obligations are included at Arts. 91-101 in the Employment Law. Whereas the Law does not contain a provision dealing specifically with a situation of pandemic and focuses more on occupational health, Art. 97 reads as “The employer or his representative at the time of appointment must keep employees informed of the dangers related to their profession and preventive measures they have to take” (emphasis added).

Additionally, “the employer must provide employees with means of medical care according to the standards decided by the Minister of Labour and Social Affairs in collaboration with the Minister of Health” (Art. 96 of the Law). Overall, the employer needs to keep the employees well informed about any preventive measures taken or possibly to be taken in order to preserve health and work standards thereto.

Considering the above and for compliance purposes, the employer needs to mandatorily abide by the directions and instructions issued by the regulators, more particularly the Ministry of Labour and Social Affairs and the Ministry of Health. In a situation of pandemic, the overall directions and instructions of the Federal or Local Governments are paramount and need to be respected.

In the case of COVID19 (Coronavirus), the Ministry of Labour and Social Affairs issued recommendations so far, in order to implement, where possible, telecommuting or remote working. Whereas this poses no certain obligation for the employer to close the business or his right to call the employees in, it is the employer who will further decide on the best practice to be followed, in line with the above overarching obligations.

Can an employer cut salaries as effect of COVID 19 pandemic?

The UAE Labour Law is rendering this situation as impracticable unless the employer and the employee enter a fresh employment contract, submitted to and registered with the Ministry of Labour and Social Affairs. Again, the discussion pertains to companies that fall under the scope of UAE Federal Law no. 8 of 1980. Entities with Government Participation do not fall under these auspices.

Under Art. 60 of the UAE Employment Law, no amount of money may be deducted from an employee’s remuneration in respect of private claims, except in the following cases: excesses paid to the employee, statutory contributions that the employee needs to make, contribution to savings or certain welfare schemes, fines for offences and  amounts ordered in the execution of court judgements.

Conclusively, an employer can reduce a salary if so agreed with the employee, process that would recommendably be put in writing. Temporary reductions of salaries or of the allowances would follow the same procedure.

Can an employer force the employees in unpaid leave during the COVID 19 pandemics or as effect of that?

The Employer cannot impose their employees to avail unpaid leave, but can grant them the option to avail unpaid leave. There would be probably employees that would be able to sustain a certain period of unpaid leave, but we cannot generalize that.

Unilateral placements of employees in unpaid leave equals a breach of the employment contract, therefore may give rise to a claim against the employer. The same solution would apply in the case an employee is requested by the employer to stay at home, unpaid, without a valid justification.

Can an employer determine or impose on employees to avail annual leave?

The Employer can determine and impose unilaterally on the employees to avail annual leave. Art. 76 of the UAE Employment Law reads: “the employer may at his discretion determine the date for commencement of annual leaves and, when necessary, he may decide to divide the leave in two parts at the most.”

Conversely, certain employers offer the option or request the employees to avail annual leave days during this period in order to minimize the Coronavirus spread. The employees are advised to comply and avoid the situation when the employer unilaterally determines the dates and durations of such annual leaves.

Can an employee on probation be laid off during the COVID 19 pandemics or as an effect of that?

In such a situation, it is generally known that the UAE labour law sets the maximum limit of a probation period at 6 months (Art. 37 of the UAE Employment Law). According to the same Article, the employer may terminate the employee with no need of providing a valid reason in this respect. Correlatively, the employee may resign and leave the rescind the employment contract with no need to give notice or valid reasons in this respect.

As such, we may encounter two situations:

  1. When the employee is terminated for reasons related to work and performance, case in which the employee can be laid off as per the above procedure; and
  2. When the employee is terminated for reasons related to the impossibility of the employer to pay him due to various shortages implied by the COVID 19 pandemic. In our opinion, even in such situation the employee may be terminated immediately, according to the procedure set at Art. 37 of the UAE Employment Law, as set above.

In an employee cannot travel to UAE because of the restrictions associated with the COVID 19 pandemic, how can the employee keep his / her job?

At first, it is reasonable that in such period companies generally implement telecommuting (distance working) for prevention reasons. As such, the employee may be able to work from the distance and contribute to the organization.

Nevertheless, if an employee is laid off in such period due to alleged absences from work, then such case may account as arbitrary dismissal, difference needed to be made as to the nature of employment contract at issue.

In unlimited employment contracts, such a dismissal would account to a breach of contract on the part of the employer under Art. 122 of the UAE Employment Law: “a worker’s service shall be deemed to be arbitrarily terminated by his employer if the reason for termination is irrelevant to the work”.

As absences for extraneous cases, non-attributable to the employee are not related to the employee’s work (such as restrictions to travel triggered by the COVID 19 pandemic), the lay off in such case would imply compensations payable to the employee, as further determined in Art. 123 of the UAE Labor Law.

Briefly, the termination process would imply payment of a 30 days’ notice period, balance of annual leave, end of service benefits, a repatriation ticket and a compensation proportionate to the damages suffered by the employee as a result of such dismissal. The compensation for arbitrary dismissal may be pre-agreed in the employment contract or may be determined by the Court in furtherance to a claim. The maximum compensation is three months’ salary to be paid over and above any other contractual or statutory liabilities.

In limited employment contracts, the employer has the right to rescind the contract prior to the expiry of its term, if it pays compensation to the employee pursuant to Art. 115 of the UAE Employment Law. The amount of compensation shall in no case exceed the aggregate wage due for a period of three months or the remaining period of the contract, whichever is shorter, unless otherwise stipulated.

Whereas in such situation the law of does not necessarily qualify as a case of arbitrary dismissal, the termination process would imply payment of a repatriation ticket, balance of annual leave, end of service benefits and the statutory compensation mentioned above.

What happens if a company cannot pay salaries during or as a result of COVID 19 pandemics?

For such a situation, there are several implementable scenarios:

Redundancy: whereas not expressly mentioned as such in the UAE Employment Law, redundancy is a concept fairly recognized in the practice of the Courts and designates a situation where an employee is laid off for cost saving reasons.

Whereas redundancy is not considered to be a contractual breach on the part of the employer, it is also noted that the UAE Employment Law generally sets clear termination reasons of employment contracts:

      • Reasons related to employee’s work, activity and performance (Art. 117 of the Employment Law) for unlimited contracts;
      • Severe breaches of the employment contract and of the law itself by the employee (Art. 120 of the Employment Law), that ground termination in both limited and unlimited contracts;
      • Termination and compensation, for limited term employments contracts, provided that the amount of compensation shall in no case exceed the aggregate wage due for a period of three months or the remaining period of the contract, whichever is shorter, unless otherwise stipulated (Art. 115 of the UAE Employment Law).

In order to comply with the above requirements, a proper redundancy package would then imply the following payments to be made to the employee upon termination:

      • A notice or compensation in lieu of notice, the notice period being of minimum 30 days;
      • All accrued benefits (such as accrued but unutilized leave);
      • End of service payments, as applicable;
      • Repatriation transportation cost (flight ticket);
      • The maximum compensation is three months’ salary to be paid over and above any other contractual or statutory liabilities.

Conclusively, a form of compensation needs to exist for redundancy cases and is usually pre-agreed in the employment contracts. If no proper referral and documentation is maintained, then such termination would account as arbitrary, therefore as a contractual breach on the part of the employer.

Hardship: whereas the UAE legal system does not use per se such a name for the situation at issue, it is generally understood as a case where a party to a contract cannot cope with their obligations due to unforeseeable situations or the execution of the contract becomes burdening to the debtor (such as the Coronavirus pandemic).

 Whereas the concept, its applicability and boundaries are left at the discretion of the judges, we may understand from here that parties to an employment contract may agree temporary reductions or instalment payments of salaries (if properly documented between the employer and employee). Needless to mention, the obligation of paying salaries subsists during and post the hardship event, even if it is complied with in installments or with certain contractual concessions on the part of employees.

In UAE, there are certain relief measures announced officially, especially targeting SME’s during the COVID 19 pandemic; therefore companies may avail various funds in order to maintain the business and continue paying salaries, which is one of their main statutory obligations.

Non payment: as obvious, nonpayment of salaries accounts to a contractual breach on the part of the employer, with all contractual and statutory consequences implies by such breach, including bankruptcy proceedings or even more severe penalties.

What happens if an employee is laid off during the COVID 19 pandemic? What happens with rent payments, medical insurance, residence visa?

Overall, we would differentiate here in between a lawful dismissal and an unlawful dismissal.

In the first case (lawful dismissal) the employee’s residence visa and consequently employer provided medical insurance will be cancelled, therefore their benefits cannot be availed.

In the second case (unlawful dismissal) the employee has the right to claim breach of contract against the employer, case in which his medical insurance and residence visa may be maintained valid in consideration of an official complaint lodged by the employee with the Ministry of Labor and Social Affairs.

In both cases above, the employee may benefit from the officially announced relief measures implemented by the Federal and / or Local Governments, such as: free medical assistance or the already announced suspension of payments to banks in consideration to the UAE Central Bank Targeted Economic Support Scheme. As of today, March 23 2020, the Abu Dhabi Judicial Department announced additional relief measures, including the ban on evictions for a temporary period during COVID 19 pandemic. We hope that similar measures will be implemented soon by the other Emirates.

Should an employee be confirmed to have contracted COVID-19, do employers have a responsibility to report this information? 

Whereas there is no statutory right to report this information for the employer, as part of their overarching obligation to ensure work safety as per Art. 91-101 of the UAE Employment Law, they should critically focus on prompt action and emergency procedures to prevent the spread of the virus in the workplace.

Notably, it is already known that an employee testing positive for COVID 19 would be immediately quarantined, with full medical reports being sent to the relevant health authorities. Whereas the health authorities may initiate a wider process to determining with whom the employee got in contact, the employers are encouraged to support systematically any such initiatives.

Can COVID 19 be an occupational disease? If tested positive, can the employee avail medical leave

The list of occupational injuries and diseases in UAE is listed at Schedules 1 and 2 of the UAE Employment Law. Whereas the case at issue (COVID 19) is not listed among them, there is a slight possibility for the employee to succeed in such a claim if the latter proves in Court the causal link between the work and contacting the virus. If such a claim is successful, then the employee must be compensated.

The medical leave is a statutory right for the employee, therefore if tested positive, the employee may avail medical leave within the conditions and as per the limits established in the employment contract and in the UAE Employment Law.

In fear of not being paid or laid off, people (even sick) may still go to work. Is this legal?

In our opinion, it is both the employer and the employee who had a role to play in such situation. As normal, an employer should not allow attendance for an employee that gives signs of being infected with COVID 19 and, purportedly, should have remote work procedures (as appropriate to the nature of the job). Employees would need to be encouraged to maintain and avail such benefits, given the systematic recommendations issued by the regulators. However, an employee who knowingly exposes others to contacting the COVID 19 can be, to certain extent, subject to more severe legal proceedings (that exceed the scope of an employment relation and are subject to criminal proceedings).

 

For any legal assistence related to employement, please do not hesitate to reach us at, please email us at info@fichtelegal.com or call +971 4 435 7577

Salient Q&A on the impact of COVID-19 on the labor market in the UAE was last modified: April 3rd, 2020 by Dr. Laura Voda