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UAE’s resolution to stabilise private sector employment gives businesses a free hand on contract change

On April 2, 2020

The UAE’s Ministry of Human Resources and Emiratisation (MOHRE) passed Ministerial Resolution No (279) earlier this week, addressing concerns of employment and job security in the private sector. According to the resolution, companies affected by COVID-19 could ‘reorganize the work structure’ through the following steps:

  1. Implementing the telecommuting system. 
  2. Granting paid leave. 
  3. Granting leave without pay. 
  4. Reducing wages temporarily during the period referred to. 
  5. Reducing wages permanently. 

These measures apply only to ‘non-citizen’ employees – a discrimination that renders migrant workers (of all income brackets) as completely dispensable. Nearly 89% of UAE’s 9.7 million population are non-citizensWhile the resolution states that these procedures should be undertaken ‘in agreement’ with the non-citizen employee, individual employees have little or no agency under the Kafala system. The assumption that the employee has the power to negotiate terms is moot. Because of this skewed power relationship, these measures may well result in a unilateral change in contractual obligation. 

Furthermore, though these five aforementioned measures are to be taken gradually, there is no mention of a timeline or how long each measure needs to be attempted for before moving to the next step.

Businesses can also register those employees in ‘surplus’ in the Virtual Labour Market system. However, the employer must take responsibility for housing and other entitlements, except wages, which would be paid by the new company that uses the worker’s service (Article 3).

These measures do not apply to businesses registered in the free zones of the Emirates. The Dubai Free Zone Council has postponed payment of rent for six months, cancelling fines, refunding insurance amounts and security deposits and allowing free movement of labour between companies in the zone.

While Qatar has announced injection of funds into local businesses, with specific directive to pay all workers from the funds, none of the other GCC countries including the UAE has made a public appeal to protect workers wages. According to sources, Saudi Arabia has even temporarily suspended its Wage Protection System.

Despite the work from home directive and curfews, construction continues uninterrupted in the Emirates. The UAE has said it is taking all precautions to protect workers and is conducting large scale testing for the COVID-19, yet the numbers testing positive continue to be small. The figures released by the UAE (over 600) seem especially conservative when compared to the number of returnees testing positive in India. Indians comprise close to 40% of the Emirates’ total population. 

On Tuesday, the country announced a two-week lockdown on the densely populated area of Al Ras area. While it has in place a curfew from 8 p.m. to 6 a.m. this is the first of its kind lockdown in the country.


Access: Ministerial Resolution