Companies allowed to lay off additional staff, cut salary during coronavirus crisis period

The Ministry of Human Resources and Emiratisation has allowed private sector businesses affected by the COVID-19 measures to restructure the contractual relationship with employees. These contractual changes are to be made in mutual agreement through gradual procedures.

Under the decision approved by Nasser Thani Al Hamli, Minister of Human Resources and Emiratisation, businesses affected by precautionary measures taken to prevent the spread of coronavirus and seeking to reshuffle their business structure shall gradually adopt the following actions, in agreement with their employees:

– Implementing a remote work system

– Granting employees paid leave

– Granting employees unpaid leave

– Temporarily reducing salaries during the aforementioned period

– Permanently reducing salaries

Dealing with additional staff

The decision, which will be effective from the date of issuance – March 26, states that affected businesses having more employees than they need must register the additional staff on the virtual job market, so that they can be recruited by other businesses.

Meanwhile, these businesses will remain obliged to provide these employees with accommodation and other dues, except for salary, as long as they are in the country or until they are hired by other businesses.

New hires

Under Article 4 of the decision, businesses seeking to recruit during the suspension of overseas hiring shall be required to:

– Post their vacancies on the virtual job market, search through available data, and select whoever meets the requirements

– Apply for a work permit from the ministry, which will be provided through online systems, and hire selected candidates. Businesses can choose from a transfer work permit of the employee to new employer, temporary work permit or part-time work permit.

Temporary reduction of salary

Article 5 states that businesses seeking to temporarily reduce the salary of an employee during the said period shall sign an additional annexure. The validity of this temporary annexure is limited to the agreed-upon term, or as long as this resolution remains valid, whichever is.

This annexure can be renewed in the agreement of both parties. It shall be issued in two copies, with one copy for each party. The employer should be ready to present it to the ministry whenever requested.

Permanent reduction of salary

Under Article 6, businesses seeking to permanently reduce the salary of an employee should first obtain the ministry’s approval to do so by applying for ‘change of a job contract’s data’ according to effective procedures.

Job seekers

As per Article 7, employees in the country looking for jobs should register with the virtual job market and apply for available jobs listed by registered organizations based on their qualifications and experience.

The provisions of this resolution is only applicable to expatriate employees and during the period of applying the above-mentioned precautionary procedures.

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