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Employers cannot force employees to take salary cuts or unpaid leave without consent Image Credit: Stock

Dubai: Employers in the UAE cannot force employees to take unpaid leave or a reduction in their salaries without their consent, top legal experts have clarified.

Speaking to Gulf News on the fine print of the Ministerial Decision No. 279/2020 recently issued by the Ministry of Human Resources and Emiratisation (MOHRE) in the wake of the COVID-19 outbreak, they said a mutual agreement between the two parties is a must in the two scenarios.

They said employers are well within their rights to ask employees to work remotely or consume their annual/paid leave balances without seeking the employees’ consent. However, implementation of unpaid leave and amendment of employment contract for a temporary or permanent reduction in salary requires an agreement to be signed, with a permanent amendment being necessarily registered with MOHRE.

Act in good faith

Barney Almazar

Barney Almazar, director, corporate-commercial department, at Gulf Law, said, “We have been receiving around 200 queries a day both from employees and companies asking what can they can legally do to address the current crisis.”

He said, “My advice is to always have a dialogue. Both employers and employees should work together to find a mutually acceptable solution which must be fair to both sides. After all, this is only a temporary measure.”

He said, “Employers must be transparent and should act in good faith. Before taking drastic actions, they should first attempt to resolve the situation with lighter measures. What we are avoiding is a situation where the vulnerable is abused. In most of the companies I represent, the biggest pay cut is applied to the high level management, with some officers contributing their salaries to ensure rank and file employees have money for their families. In return, appreciative employees render extra hours waiving overtime pay.”

He said, “Employers must extend every possible assistance while employees should cooperate with the efforts of the company, think of the welfare of their colleagues and evaluate the chances of gaining new employment if they leave their present job. But in the unfortunate situation that the parties cannot mutually agree, the company has the right to terminate the employee. The employee is entitled to full end-of-service benefits.”

How employees are convinced

Mohammed Ebrahim Al Shaiba

Addressing a specific question by an employer on how employees can be convinced to take unpaid leave for, say two months, due to the current situation, Mohammed Ebrahim Al Shaiba of Al Shaiba Advocates and Legal Consultants, said, “The act is legal if it is accompanied by the acceptance of the employee which means that there should be a mutual agreement between the two parties of the employment contract where the employee accepts this act in order to preserve the interests of both parties during the period of applying precautionary measures to limit the spread of the new coronavirus. This agreement can be in the form of a leave application or any kind of annexure where the employee expresses his acceptance.”

He said as per the UAE Federal Law No. 8 of 1980, regarding the regulation of labour relations and the Ministerial Decision No. 279 of 2020, mutual agreement between the two parties of the employment contract is essential in order to preserve the interests of both parties during the period of applying precautionary measures to limit the spread of the new coronavirus.

The way it works

The legal experts said the Ministerial Decision No. 279/2020 allows employers affected by the COVID-19 crisis to take certain measures progressively with regard to expatriate employees

Employer actions that do not require employees’ consent:

  • Asking employees to work remotely, as applicable
  • Ask employees to consume annual/paid leave balances

Employer actions that require employees’ consent:

  • Implementation of unpaid leave
  • Amendment of employment contract for a temporary reduction in salary: Here, the employer should retain an original copy of the amendment and provide the employee an original copy as well. The amendment must be readily available for inspection by MOHRE. The parties can agree on the duration of the reduction of salary, provided that the amendment are considered cancelled once the Ministerial Decision has been repealed. There is no need to go to MOHRE to execute the amendment.
  •  Amendment of employment contract for a permanent reduction in salary: In this scenario, the amendment must be registered with MOHRE under the “employment contract details amendment” procedures since this is a permanent change in the salary of the employee.

Al Shaibha said, “In addition, based on the doctrinal principle of “no prejudice caused and no harm inflicted’, the employer is advised to have a mutual agreement and acceptance from the employee that preserve and suit the interests of both of them in order to adhere to law and to be protected in case a claim has been filed against him in the court.”

What are employers liable for?

The legal experts said employers are required to register any redundant workforce they have on the MOHRE’s Virtual Labour Market to allow them to be recruited by other employers. During this period of time and until the employee has left the UAE or joined another company, employers will remain liable for housing and all other entitlements except for salary.

They said employers can ask employees to take their annual leave—pursuant to Article 76 of the Labour Law.

“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, except in cases of juveniles where vacation may not be divided in parts,” said Almazar.