November 9, 2020

COVID-19: UAE Free Zone Labour Regulations Update

dubai-businessman-holding-regulations

With the ongoing pandemic, many businesses in Dubai and those looking to enter the Middle Eastern market have increasing concerns about any updated regulations that impact their workforce. Most businesses based onshore and in the majority of the free zones (excluding the DIFC and ADGM) will only need to comply with Federal Law No. 8 of 1980 (the UAE Labour Law). It is, however, important to note that businesses operating in any free zones may, in addition, need to comply with any additional regulations set by their free zone.

Here at Dubai Multi Commodities Centre (DMCC), all members also need to comply with our recently updated DMCC Guidelines No.1 of 2020 which seeks to protect the interests of both employers and employees in the free zone during the COVID-19 pandemic.

If you are looking to start your business or have already set up your business in DMCC our legal partners who were appointed to draft the Guidelines, from DWF Middle East and Gateley UK LLP can help break down the related employment measures so your business can stay compliant with the free zone’s regulations.

DMCC Employment Guidelines No.1 of 2020

DMCC’s Guidelines were created with Dubai Multi Commodities Centre Authority (“DMCCA”) and includes updated rules and regulations on employment. These updated guidelines reflect the evolving, flexible operational practices during COVID-19 while aligning with health and safety regulations. The Guidelines address measures related to remote work, paid and unpaid leave, and temporary salary reduction.

Remote Work

As social distancing becomes the norm, the updated Guidelines’ policy on remote work accounts for this. The Guidelines state that employees can work remotely when requested by their employers. However, if your company decides to implement work from home policies, you will need to provide your remote employees with all the necessary equipment and services to complete their tasks.

Given that employees are working remotely from their home, you are also advised to revise your confidentiality policy to account for remote work configurations. Any related arrangement should not impact any parties’ rights and obligations under the law or contract.

While many would prefer to work from home during this period, priority should always be given to employees who fall under any of the following categories:

  • Pregnant women;
  • People aged 55 years and above;
  • People of determination;
  • People with respiratory or chronic diseases; or
  • Mothers of children in Grade 9 and below.

Paid and Unpaid Leave

Companies, especially those with limited operations, can place employees on paid leave for as long as necessary without requiring the employee’s consent. This leave can also be deducted out of the employee’s annual leave allowance.

For companies that prefer not to place their employees on paid leave, you can consider unpaid leaves. However, both parties need to mutually agree to this and determine a leave period. Employers also need to be mindful about not forcing their employees into unpaid leave as this would be deemed a breach of the employment agreement.

Temporary Reduction of Basic Salary

During these volatile times, many companies’ revenues have taken a big hit. To mitigate this, some companies may be considering a temporary reduction of employees' basic salary.

If your company is considering the same, you should be aware that a forced pay cut is illegal; any pay cut needs to be mutually agreed and documented by both the employer and the employee. It is important to note that if a salary deduction is made without your employee’s consent, they may dispute it.

Other Employment Measures in the Guidelines

While implementing any of the above solutions, it is crucial that employers do not infringe on any employee’s rights, including but not limited to, access to medical insurance, residence visas, work permits and transportation or accommodation provided by the company. Additionally, employees’ accrued end of service gratuity should not be reduced as a result of a temporary pay cut.

Visa Updates

Labour laws and the Guidelines are not the only updates that employers need to concern themselves with. Updates to visa and immigration regulations during the pandemic have a significant impact on employment in the UAE.

Based on regulatory updates on 5 October 2020, work permits can now be issued for employees in vital sectors, semi-government and government organisations. However, the suspension of visas on arrival being issued for all except diplomatic passport holders is still in place. This means that unless your business is considered an essential business, it is not possible for your business to hire any new employees from abroad during the pandemic period.

However, the UAE government has allowed visa extensions to 17 November 2020 for those who have their citizens, GCCs citizens or expatriate resident visas expiring after 1 March and have allowed for a 3 month grace period for any visa violations from that period as well.

As the pandemic has caused governments globally to place temporary restrictions on immigration, there may be instances where employees are unable to enter the country due to visa suspensions. For employees who are unable to return to their position in the country, employers are strongly discouraged from filing for absconsion. Employees will only be able to return after approval from immigration authorities.

Returning to Normal Business Operations

As Dubai worker return to business as usual, companies will need to establish a strategy to enable employees to start returning to work by implementing phased returns with the following restrictions to prevent a new wave of cases:

  • Limit office capacity at 30%
  • Preventative measures are enforced
  • Screening points at workplace and staff accommodations
  • Limit vehicle capacity at 25%

In addition to the above, companies need to inform health authorities of any suspected cases. In fact, it is encouraged and permitted that employers collect and share their employees' data for health, safety and wellbeing purposes.

Complying with Updated Guidelines

If you have a company set up in DMCC, you need to be mindful about complying with both federal legislation and the Guidelines. Breaches to either regulation may lead to disputes. In the event of a dispute, mediation services can provide both parties with a neutral ground to negotiate a settlement. DMCC Disputes Centre offers both workplace and commercial mediation services on termination, resignation, salary, breach of contract, end of service benefits issues, and more.

 

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Topics: Business in Dubai, COVID-19, Employment Visas, Regulatory Compliance

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