Covid-19 impact on businesses and HR in the UAE

As the coronavirus pandemic continues to spread around the world and within the region, businesses and employers are being required to rapidly adapt to new ways of working from both a cultural and a legal perspective. We explore the ways in which our clients and the markets are adapting to the new normal to safeguard employee and customer health, while also helping business to begin moving forward again.

It is imperative that businesses understand how they may be affected by and are required to comply with new regulations which have been put into place by the UAE government. Ultimately, the two objectives of the authorities are to protect the health and safety of the UAE residents while supporting businesses in achieving their economic objectives.

Remote Working
At the time of writing, remote working systems put in place by the Ministry of Human Resources and Emiratisation to minimise the spread of the coronavirus, permit all private sector companies (apart from essential industries) to have a maximum of 30 per cent of the workforce at each private establishment.

To implement this law, employers should take all the necessary steps to facilitate smooth remote working for employees wherever possible. We then recommend that companies only permit employees to return to the workplace where either (1) employees are unable to perform their roles remotely or (2) employees are keen to return to the workplace for personal reasons. This is a crucial period for the employer-employee relationship and in addition to not breaking any laws at this stage, it is essential that employers do not break the fundamental trust and confidence in their workforce relationship when asking employees to return to the workplace.

In addition to ensuring that the staff has access to the correct technology to work remotely, employers should also consider additional policies to facilitate working from home, such as apps to supervise the quality of input and measures to protect the company’s confidential information, as well as employee and client personal data.

If the business does not have an official “work from home” policy in existence, we recommend that businesses develop a new working arrangement and ensure that this is acknowledged and signed by all employees to clarify and properly implement any such arrangements.

Ministerial Resolution 279 of 2020
The UAE has recently passed Ministerial Resolution 279 of 2020 which permits businesses affected by the Covid-19 situation to grant their employees unpaid leave and/or reduce their salaries temporarily, subject to agreeing any such approach with the affected employees.

This is much-needed support for companies that are struggling to maintain normal operations at this time. Before implementing any such measure, we recommend that companies analyse their market position, client behaviour and consider how the pandemic and its effects could continue to develop in the short to medium term.

Companies can then make policy decisions and manage their workforce based on this analysis – using those predictions to mitigate through these tough times. Whilst temporary or fixed-term salary reductions are likely to safeguard the company and protect jobs in the next few months, this is not a sustainable approach in the long-run and in certain sectors, there is already competition for talented employees.

To mitigate business challenges, companies are also implementing mandatory periods of annual leave. This does have several benefits insofar as it removes financial liability of the company, will ensure that many of the staff are available to return to work if and when the economy strengthens and of course should help to protect jobs during this difficult period.

With regards to sick leave, the entitlement is 90 calendar days per year. Companies are not allocating mandatory periods of sick leave at the moment but it will be an option for employees to take should they contract Covid-19 or any other illness during this period.

Redundancies
Businesses deciding to make any redundancies during this period will be obliged to provide requisite dues including notice pay and end-of-service gratuity. In addition, should any employee be unable to find alternative employment or return to their home country following the termination of employment, the company is required to continue providing all benefits other than basic salary until the individual has repatriated or found alternative employment.

If there is a dispute arising out of a company taking cost cutting measures, either party should raise a complaint directly with the other party to try to achieve an amicable resolution. If no agreement is reached, either party can apply to the governing authority (either the Ministry of Human Resources and Emiratisation or the Free Zone Authority) that governs the UAE entity. In order to mitigate any such risks, we recommend that companies consult with all employees, fully explain the financial stress that the business is experiencing and consider all possible amicable solutions, before taking any unilateral decisions.

The best way that companies can approach this situation is to prioritise trust with their employees and engage with them – in addition to clients – to understand the demands of the market for the coming months and make policy decisions based on feedback, forecast and government guidance.

Once the market begins to normalise and the economy eventually recovers, companies that supported their employees along with protecting the business will be those that emerge strongest from the pandemic.

At this stage, we recommend that companies continue to closely monitor government guidance and the guidance of the authority which governs their employment relationships. The situation has moved extremely quickly over the past few months to implement legislation to support companies and individuals in these circumstances, and we expect it to continue doing so in the short-term future.

Luke Tapp is a partner – Employment at Pinsent Masons