28 Apr 2020

Employers are now permitted to take precautionary measures in respect of COVID-19 in the DIFC

Authored by: Rachel Hill

In brief:

  • On 21 April 2020 the DIFC issued Presidential Directive No. 4 of 2020 in Respect of Covid-19 Emergency Measures (the Directive) to assist employers;
  • The Directive authorises an employer to implement any one or more of a defined list of precautionary measures (defined below) without the consent of the employee; and
  • While the Directive may temporarily circumvent the need for employee consent to amend contractual terms and benefits, it remains best practice to ensure all employees are consulted and aligned with any proposed changes to their terms of employment in advance of applying a precautionary measure


Background

On 21 April 2020 the DIFC followed suit with its onshore compadre, the Ministry Of Human Resources and Emiratization, and issued its own directive to assist employers. This directive provides lawful ways to best protect both business interests and employment of employees during the commercially challenging period which has resulted from the COVID-19 pandemic.
 

Precautionary Measures

The Directive, somewhat controversially, moves away from the common law principal that an employer may not unilaterally decrease an employee’s fundamental contractual benefits by authorising an employer to implement any one or more of the following precautionary measures (Precautionary Measure) without the consent of the employee –

1.         Impose reduced working hours;

2.         Impose vacation leave;

3.         Impose unpaid leave;

4.         Impose a temporary reduction of salary;

5.         Restrict workplace access; and

6.         Direct remote working including imposing means of measuring productivity whilst working remotely.

A Precautionary Measure may be implemented only for the duration of the Directive’s legality period which is detailed as “up to and including 31 July 2020 or such other date confirmed by the President in a separate directive”. Employers are obliged to notify employees in writing 5 days before imposing any chosen Precautionary Measure.
 

End of Service Gratuity and DEWS

The Directive confirms that end of service gratuity payments will not be prejudiced by implementation of a Precautionary Measure, yet does not offer employee protection in respect of those receiving employer contributions to the recently imposed mandatory employee workplace saving scheme.
 

Sick leave

The Directive provides that any sick leave taken by an employee during the duration of the Directive (i.e. 22 April 2020 until 31 July 2020) due to contracting COVID-19 or by being placed in quarantine following the direction of a “Competent Authority”, as defined by the Directive, shall not count towards any sick leave entitlement that an employee is entitled to under the DIFC Employment Law. In fact, employees will be entitled to full pay during any COVID-19 sick leave period (for as long as the sick leave certificate is valid and/or the quarantine is imposed), and may not be subjected to any Precautionary Measure that was not already applied to them prior to any such period of sick leave.

The Directive further provides that it will not be permissible to terminate the services of an employee who has taken more than the maximum aggregate 60 working days of annual sick leave entitlement under the DIFC Employment Law by reason of any COVID-19 related sick leave.
 

Termination of employees

While the Directive does not prohibit or affect the ability of an employer to terminate an employee during its application, it provides that employers may defer visa cancellation provided that they continue to provide medical insurance and, for those employees of the retail, service or hospitality sector maintain the relevant accommodation until such times as the visa is cancelled.
 

Conclusion

In conclusion, while the Directive may temporarily circumvent the need for employee consent to amend contractual terms and benefits, it remains best practice to ensure all employees are consulted and aligned with any proposed changes to their terms of employment in advance of applying a Precautionary Measure. This ensures that any change is handled in a manner that balances protection and continuity of business with maintenance of goodwill of employees.

 
 

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the developing jurisdiction of the UAE.