Once again, UAE employers and employees find themselves having to decide how to best navigate the effects of an ongoing crisis. Employers must decide whether and how to reduce their workforce in line with company financial considerations amid rapidly changing regional security developments. Employees in the UAE during COVID-19 may recall the emergency measures the government authorities enacted to address the loss of work and the inability to travel. The combined experience of COVID-19 and the updating of the UAE Labor Law in 2021 (Labor Law) provide employers with several options to reorganize their workforce short of termination.
Where calamities impact employment conditions, both employers and employees require essential information from which to make the best possible decisions, given the particular circumstances at hand. As the war continues and its impact on business becomes apparent, employers must strategically plan how to keep their businesses afloat while managing staffing. At the same time, employees need to know their legal rights regarding options that are available to employers to address the changing employment issues.
Employers are best served by having a well-thought-out process and plan which considers alternative means of retaining their workforce. It is critical for employers to be transparent with employees about how the Company is handling the situation. The Company must clearly communicate its plan and provide the opportunity for employees’ input and questions.
We are living in uncertain times and under exceptional circumstances which require empathy, consideration, and flexibility between an employer and its employees. As much as possible, employers must avoid mixed messages, as they can create stress and uncertainty among employees. Clear leadership is key, and employers should ensure employees know that someone on the leadership team is available to speak with them about their immediate concerns.
Depending upon the specific circumstances when developing a plan, employers may initially consider alternative means of reducing the workforce. Employees should be aware that alternatives include reducing staffing costs, as well as temporary reductions in hours and salary. Given the rapidly evolving nature of the war, it is prudent for employers to consider any staffing changes temporary and revisable as conditions require.
Options that do not require employee written consent and need only be requested by the employer include:
– Implementing remote work
– Granting vacation leave
Both options address employees’ concerns about their own and their family’s safety. Employees with children have an additional responsibility, as the Ministry of Education has required distance learning for the next two weeks of the third academic term. Whether working remotely or taking vacation leave, for some employees, being at home with their family during these stressful times is important.
Should the war continue and affect businesses such that they must reduce costs, employers, upon written agreement with the employee, may:
– Grant unpaid leave
– Temporarily reduce working hours
– Temporarily reduce salary
– Permanently reduce salary
The Labor Law provides that the above options are lawful with the written consent of the employee. Because of the uncertain duration of the current situation, reductions in hours and salaries should be limited to set periods of time and revised or extended upon expiration of the temporary term. Should the conflict continue for an indefinite period and the financial burden on a company make it untenable to retain employees, an employer, upon providing proper notice, may terminate employees.
Clear communication and transparency between employers and employees about how the war is impacting staffing, and the company’s plan to handle its staffing issues, are critical in reducing employee uncertainty. There is no single correct way of meeting this ongoing crisis. Depending upon the industry and its workforce, employers and employees must respectfully communicate and work together to get through these uncertain times.
Disclaimer
This publication does not provide any legal advice, and it is for information purposes only. You should not rely upon the material or information in this publication as a basis for making any business, legal, or other decisions. Any reliance you place on such material is therefore strictly at your own risk.
