UAE Labour Law Update (COVID-19): Ministerial Resolution No. (279) of 2020

The new resolution 279/2020 allows for salary reduction during the referenced period or permanent salary reduction. But 5 (FIVE) conditions are required i.e.:

1. Establishments must be affected by such precautionary measures

2. It has to be in agreement with the employee

3. It must be gradual

4. It must be approved by the Ministry for reduction of salary

5. The revised contract for permanent and temporary must be uploaded.

Alternatively, the employer can grant either paid leave or unpaid leave. But if the employer terminates the employment agreement, the Employee can claim arbitrary dismissal compensation.

Salient Features

1. Applicable to private companies and non-national worker in order to protect the interest of both parties.

2. Establishments affected by such precautionary measures and wishing to reorganise their work shall progressively proceed with their actions, in agreement with the non-national workers to:

• Implement remote working system.
• Grant paid leave.
• Grant unpaid leave.
• Temporary salary reduction during the referenced period.
• Permanent salary reduction.

3. Establishments can transfer the workers depending on the need of other establishments provided that they remain committed towards their workers in terms of accommodation and payment of all entitlements (except for wages) until they leave the state or obtain a permit to work for another establishment.

4. Creation of Virtual Job Market since there is a cessation of overseas labour supply, potential employers can announce job vacancies in the Virtual Labor Market, search into the available labour database and select workers who meet the job requirements. The available work permits are work permit for transferring the worker to another employer, temporary work permit and part-time work permit.

5. Temporary supplementary contract as per MOHRE format, in two copies, one copy for each party which expires on the end date mentioned or on the expiry of Resolution No. (279) of 2020. And the same can be renewed by agreement of both parties.

6. Ministry's approval required to amend the employment contract.

7. Those present in the country can register and apply to the Virtual Job Market.

8. Applicable only to non-national workers during the precautionary measure period.

9. In force from the date of its issuance i.e. 26 March 2020.

This decision will contribute to enhancing the business environment in the UAE, empowering employees to sustain themselves and provides immense support to SMEs. Coronavirus (COVID-19) continues to create unforeseen legal challenges.

Written by:

Nikhat Sardar Khan | Kochhar & Co Inc. Legal Consultants (Dubai Branch)