BASIC SALARY REDUCTION?
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BASIC SALARY REDUCTION?
With the recent outbreak of the COVID – 19 Virus, the hardest hit are establishments within the hospitality, F&B and retail industry, with many restaurants, gyms and many other businesses being forced to shut their doors temporarily or at least downscale their production and/or services drastically.
The greatest expense for most businesses is the payment of employee salaries. In circumstances where businesses are sometimes not operating and employees are not working as a result of the COVID-19 outbreak and the resulting measures adopted by the UAE government, certain queries arise.
BSA provides answers to these queries in an effort to allow employers/businesses to curb their losses and employees to know their rights.
Employment provisions relating to the COVID-19 outbreak
At the outset, it is important to note that, to date, no special provisions/exceptions have been implemented to govern the relations between (1) the establishments that have been affected by the mandatory closures relating to the COVID-19 outbreak (or any establishment facing the direct/indirect repercussions of the pandemic); and (2) their employees.
BSA has reached out to the MOHRE and they have confirmed that their stance thus far is that the COVID-19 outbreak has not been declared a force majeure event and in the absence of special provisions relating to the exceptional measures taken as a result of the COVID-19 outbreak, the status quo remains and both employers and employees will be bound by their rights and obligations as outlined in Federal Law no. 8 of 1980 (as amended) (the ‘Labour Law’) and their relevant employment agreements.
In light of this unprecedented global pandemic, it is preferable for employers and employees to enter into discussions, negotiate and agree upon terms that are acceptable to all parties involved.
Can an employer terminate an employee under the current circumstances resulting from the COVID-19 pandemic?
Yes, however, such employer will be at risk of facing arbitrary dismissal claims.
In the absence of specific provisions adopted as a result of the COVID-19 outbreak, employers can terminate their employees, however, such terminations will be governed by the provisions of the Labour Law and the relevant employment contract(s). Any such employers will likely be required to settle the employees’ dues (including but not limited to payment in lieu of notice) and will be at risk of facing arbitrary dismissal claims. In circumstances where the Covid-19 has not been declared a force majeure event, employers will need to assess this risk in light of the Labour Law.
The same rules will apply as regards limited term employment contracts given that the Covid-19 outbreak has not yet been deemed a legitimate justification for termination. As such, if an employer terminates an employee as a result of the Covid-19 pandemic, the termination will be considered to be without cause and the employer may be held liable for compensating the employee.
Can an employer compel its employees to take unpaid leave?
No.
In light of the Covid-19 outbreak and resulting mandatory closures, many employers are likely to attempt to avoid payment of their employees’ salaries and consider their absence as ‘unpaid leave’.
Any such attempt will be considered unlawful under the Labour Law as employers are not permitted to ‘freeze’ the employment of their personnel for a set period of time.
Unless the parties agree that the employee will be taking an unpaid leave, an employer’s instruction to enforce unpaid leave on his employees will constitute a breach of the Labour Law (as outlined above) and the contract given that the employer will be failing to pay the employee’s salary (in accordance with the terms of the employment contract).
Can an employer compel its employees to take their annual (paid) leave during the Covid-19 outbreak?
The general principles embodied in Article 76 of the Labour Law state that the employer may determine the date of the commencement of the annual leave, and may divide it if necessary, to two or more periods. This right has been given to employers since they are the responsible persons who are aware of the volume of work being undertaken by the company, and also to determine the priority as to when the work must be executed. This right is given with a view to prioritize continuity of work. In view of this principle, the converse is also applicable during this period of slowdown caused by the outbreak of Covid-19, where there is a discontinuity of work. Therefore, given the above information, the employer can determine the date of commencement of an employee’s annual leave during the Covid-19 outbreak.
Can an employer impose a salary reduction?
No.
Should an employer perform any deduction of salaries outside the scope of Article 60 and the employment contract, an employee can seek the recovery of any deducted amount(s) before the competent labour courts.
In a context of cooperation during these unparalleled circumstances, parties may wish to agree upon a structure suitable for both the business, which is likely to be facing financial difficulties arising out of the Covid-19 outbreak, and its employees, who need to be paid their salaries, in an effort to avoid mass terminations as a result of the pandemic.
Is there a moratorium on salary payments?
The MOHRE has confirmed that at this point, the status quo remains, notwithstanding the Covid-19 outbreak. As such, there is no moratorium on the payment of salaries and employers must continue with making salary payments unless the employment contract provides otherwise.
The peculiarity of the situation will undeniably need to be considered by labour courts when hearing employment cases arising out of the Covid-19 outbreak.
Taking affirmative steps now is especially important as companies currently can foresee and attempt to mitigate any potential operational impacts in advance of the outbreak spreading to any new locality. Ideally, businesses will be able to plan accordingly to avoid any disruptions in their operations if the virus continues to spread.
We urge individuals and businesses to seek legal advice as to their existing and future contracts with the above information in mind.
The greatest expense for most businesses is the payment of employee salaries. In circumstances where businesses are sometimes not operating and employees are not working as a result of the COVID-19 outbreak and the resulting measures adopted by the UAE government, certain queries arise.
BSA provides answers to these queries in an effort to allow employers/businesses to curb their losses and employees to know their rights.
Employment provisions relating to the COVID-19 outbreak
At the outset, it is important to note that, to date, no special provisions/exceptions have been implemented to govern the relations between (1) the establishments that have been affected by the mandatory closures relating to the COVID-19 outbreak (or any establishment facing the direct/indirect repercussions of the pandemic); and (2) their employees.
BSA has reached out to the MOHRE and they have confirmed that their stance thus far is that the COVID-19 outbreak has not been declared a force majeure event and in the absence of special provisions relating to the exceptional measures taken as a result of the COVID-19 outbreak, the status quo remains and both employers and employees will be bound by their rights and obligations as outlined in Federal Law no. 8 of 1980 (as amended) (the ‘Labour Law’) and their relevant employment agreements.
In light of this unprecedented global pandemic, it is preferable for employers and employees to enter into discussions, negotiate and agree upon terms that are acceptable to all parties involved.
Can an employer terminate an employee under the current circumstances resulting from the COVID-19 pandemic?
Yes, however, such employer will be at risk of facing arbitrary dismissal claims.
In the absence of specific provisions adopted as a result of the COVID-19 outbreak, employers can terminate their employees, however, such terminations will be governed by the provisions of the Labour Law and the relevant employment contract(s). Any such employers will likely be required to settle the employees’ dues (including but not limited to payment in lieu of notice) and will be at risk of facing arbitrary dismissal claims. In circumstances where the Covid-19 has not been declared a force majeure event, employers will need to assess this risk in light of the Labour Law.
The same rules will apply as regards limited term employment contracts given that the Covid-19 outbreak has not yet been deemed a legitimate justification for termination. As such, if an employer terminates an employee as a result of the Covid-19 pandemic, the termination will be considered to be without cause and the employer may be held liable for compensating the employee.
Can an employer compel its employees to take unpaid leave?
No.
In light of the Covid-19 outbreak and resulting mandatory closures, many employers are likely to attempt to avoid payment of their employees’ salaries and consider their absence as ‘unpaid leave’.
Any such attempt will be considered unlawful under the Labour Law as employers are not permitted to ‘freeze’ the employment of their personnel for a set period of time.
Unless the parties agree that the employee will be taking an unpaid leave, an employer’s instruction to enforce unpaid leave on his employees will constitute a breach of the Labour Law (as outlined above) and the contract given that the employer will be failing to pay the employee’s salary (in accordance with the terms of the employment contract).
Can an employer compel its employees to take their annual (paid) leave during the Covid-19 outbreak?
The general principles embodied in Article 76 of the Labour Law state that the employer may determine the date of the commencement of the annual leave, and may divide it if necessary, to two or more periods. This right has been given to employers since they are the responsible persons who are aware of the volume of work being undertaken by the company, and also to determine the priority as to when the work must be executed. This right is given with a view to prioritize continuity of work. In view of this principle, the converse is also applicable during this period of slowdown caused by the outbreak of Covid-19, where there is a discontinuity of work. Therefore, given the above information, the employer can determine the date of commencement of an employee’s annual leave during the Covid-19 outbreak.
Can an employer impose a salary reduction?
No.
Should an employer perform any deduction of salaries outside the scope of Article 60 and the employment contract, an employee can seek the recovery of any deducted amount(s) before the competent labour courts.
In a context of cooperation during these unparalleled circumstances, parties may wish to agree upon a structure suitable for both the business, which is likely to be facing financial difficulties arising out of the Covid-19 outbreak, and its employees, who need to be paid their salaries, in an effort to avoid mass terminations as a result of the pandemic.
Is there a moratorium on salary payments?
The MOHRE has confirmed that at this point, the status quo remains, notwithstanding the Covid-19 outbreak. As such, there is no moratorium on the payment of salaries and employers must continue with making salary payments unless the employment contract provides otherwise.
The peculiarity of the situation will undeniably need to be considered by labour courts when hearing employment cases arising out of the Covid-19 outbreak.
Taking affirmative steps now is especially important as companies currently can foresee and attempt to mitigate any potential operational impacts in advance of the outbreak spreading to any new locality. Ideally, businesses will be able to plan accordingly to avoid any disruptions in their operations if the virus continues to spread.
We urge individuals and businesses to seek legal advice as to their existing and future contracts with the above information in mind.
short flights long nights
if you think you will fight the reduction .. I would suggest you think again.
Join Date: Jan 2005
Location: Dubai
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What the origional poster copied and pasted is no longer relavent and does not apply
If your a Non National your screwed
Rules will allways be changed in their favor not yours
Read more here
If your a Non National your screwed
Rules will allways be changed in their favor not yours
Read more here
On 26 March 2020, a Ministerial Decision was signed by the Minister of Human Resources and Emiratization, H.E. Nasser Bin Thani Al Hamli under No. 279 for 2020 in relation to the stabilization of the workforce in the private sector during the implementation period for the precautionary procedures aiming to restrict the spread of COVID-19.
This decision will apply to all entities registered with the Ministry of Human Resources and Emiratization (the “Ministry”) in respect of their relations with non-UAE national employees.
All such entities, if affected by the precautionary measures taken in relation to COVID-19, and when looking to restructure their employment conditions, are allowed to take certain measures according to the sequence of actions listed below and in agreement with the non-UAE national employees they have:
– Activate the working from home mode
– Put employees on paid leave
– Put employees on unpaid leave
– Apply a temporary reduction in salary
– Apply a permanent reduction in salary
This decision will apply to all entities registered with the Ministry of Human Resources and Emiratization (the “Ministry”) in respect of their relations with non-UAE national employees.
All such entities, if affected by the precautionary measures taken in relation to COVID-19, and when looking to restructure their employment conditions, are allowed to take certain measures according to the sequence of actions listed below and in agreement with the non-UAE national employees they have:
– Activate the working from home mode
– Put employees on paid leave
– Put employees on unpaid leave
– Apply a temporary reduction in salary
– Apply a permanent reduction in salary
Join Date: Mar 2008
Location: Not at EK :)
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EK and Dnata are classified as semi government companies. Not private sector and not government sector. These is no legal framework that disgruntled employees can use if things go tits up. Show many ANYONE who has taken either EK or Dnata to court, let alone won. The system is designed to be against expats from the start. I love it when EK moan about 5th freedom and landing issues when they are THE ultimate in stacking the odds in their favour.
Join Date: Apr 2020
Location: Luton
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By what I know they have breached all known norms of legality, decency and humanity whilst dealing with their pilots. Both locals and expats!
Very sad indeed.
Join Date: May 2017
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sadly we need to suck in the 50% cut and not hope for the inevitable. as always no news from the 9th floor but small back office on the 6th is still working and has issued pink slips to a few corporate core grades. shall we wait for ramadan to subside till another updated T&C? the metal are just painfully gathering more dust....
