COVID-19: Ministerial Resolution on employment stability

On 26 March 2020 the UAE Ministry of Human Resources and Emiratisation (the Ministry) has issued Ministerial Resolution No. (279) of 2020 on Employment Stability in the Private Sector During the Period of Application of Precautionary Measures to Curb the Spread of Novel Coronavirus (the Resolution).

The Resolution aims to protect the position of non-UAE national employees by private sector employers (who operate under the remit of the MOHRE as well as those in a few free zones that follow MOHRE resolutions) during the application of the precautionary COVID-19 measures by the UAE government.

The Resolution will remain in force for as long as the current precautionary measures remain in place and applies in respect of all non-UAE national employees employed by businesses in onshore UAE and its free zones, excluding the two financial free zones of the ADGM and DIFC which each have their own employment laws and regulations. 

The Resolution provides that affected employers shall progressively take the following five steps with the relevant employee (steps 3, 4 and 5 requiring employee consent):
1. implement remote working;
2. grant paid leave; 
3. grant unpaid leave;
4. temporary salary reduction; and 
5. permanent salary reduction.

A key change introduced by the Resolution is the creation of a "Virtual Labour Market" concept, accessible through the UAE Ministry of Human Resources and Emiratisation website here 
This enables employers to enrol employees who are otherwise surplus to their current business requirements.  They will remain as employees under the employer's permanent sponsorship and the employers will still be obliged to continue providing accommodation and other entitlements, except for wages, until the employees either leave the UAE or obtain a work permit for another employer. Other employers in need of temporary workers may use the "Virtual Labour Market" to announce job vacancies and search available workers who meet their requirements.  Current job seekers can also apply for vacancies through the system.  The Ministry will operate the "Virtual Labour Market" as an electronic and smart system and will issue temporary work permits for those employees who temporally transfer their employment to another employer.
The Resolution in Article 5 provides the following requirements when the parties agree that the employer will temporarily reduce salary:
1. Prepare a “temporary additional appendix” to the MOHRE labour contract between the two parties (in a form provided by MOHRE) with the reduction in salary being valid until the period stipulated in the appendix or until the end of the validity of this decision, whichever is earlier;
2. If required, renew the appendix referred to above with the approval of both parties; and
3. Prepare two copies of the supplement, one for each party, to enable the employer to disclose its copy upon request by the MOHRE.
Where the salary is to be permanently reduced, the employer has to apply to the Ministry for the labour contract to be amended.