Restructuring of Employment Agreements in UAE
United Arab Emirates – The Ministry of Human Resources and Emiratisation (MOHRE) Enacts a Law Temporarily Allowing the Restructuring of Employment Agreements
Effective from 26 March 2020, the United Arab Emirates (UAE) government issued Decree 279 of 2020 allowing private sector employers affected by COVID-19 to restructure the employment agreements with their expatriate employees. However, the restructuring has the completed gradually and with the mutual consent of the employer and employees. The gradual restructuring actions include the following steps:
- Implementing remote work arrangement
- Granting employees paid leave
- Granting employees unpaid leave
- Temporary reduction of employees’ salaries
- Permanent reduction of employees’ salaries
The above steps are subject to the following condition:
- Employers must register their redundant staff on the MOHRE’s virtual job market for potential recruitment by other employers.
- Employers who wish to hire expatriate employees during the period of temporary suspension of the issuance of new work permits, must search for suitable candidates from the MOHRE’s virtual job market. If they identify a suitable candidate, the new employer can choose to transfer the employee’s work permit or issue a new temporary or part-time work permit.
- For a private sector employer to temporarily reduce the salary of an expatriate employee, the employer and employee must execute a temporary fixed-term amendment to the employment agreement. The original salary of the employee will be automatically restored at the revocation of the Decree.
- Employers seeking to permanently reduce the salary of their employees must do so by following the MOHRE’s standard employment agreement amendment process.
- Job seekers located in the UAE should register with the MOHRE’s virtual job market and apply for available jobs.
The Decree applies only to non-UAE nationals and for the period of the COVID-19 outbreak.
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