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24 Apr 2020

DIFC Directive: Emergency employment measures announced in response to COVID-19

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The DIFC has issued a new Presidential Directive, effective from 21 April 2020 to 31 July 2020 (subject to any subsequent extension, the “Emergency Period”) implementing key measures to support both employers and employees during the COVID-19 pandemic.

The measures afford employers flexibility and the ability to depart temporarily from specific DIFC Employment Law obligations. They also protect employees in relation to any adverse impact on any entitlement to end of service gratuity, COVID-19 related sick leave, and finding a new job on termination.

Emergency employment measures

Subject to giving affected employees five days' prior written notice, employers will be permitted to implement one or more of the following six prescribed "Emergency Measures" - without employee consent:

  • imposing reduced working hours;
  • imposing paid holiday leave;
  • imposing unpaid leave;
  • temporarily reducing remuneration, including pay, allowances, bonuses and discretionary payments(although any reduction will not be reflected in the basic wage used to calculate end of service gratuity - see further below);
  • restricting workplace access; and
  • imposing remote working conditions and requirements (including ways of measuring employee engagement and productivity whilst working remotely - see below regarding the data protection considerations of such measures).

Perhaps surprisingly, the Directive does not set any limits on the extent of the above measures, for example, a cap on how far remuneration or working hours can be reduced.  This may be good news for employers but is likely to cause concerns amongst employees who still have financial commitments to meet.  Employers keen to maintain good employee relations in these troubled times would be well-advised not to be opportunistic in this respect, and to exercise these new found rights sensibly and reasonably.

Temporary suspension of employment (and other) law provisions

In furtherance of the Directive's aim, during the Emergency Period, the application of the following provisions of the DIFC Employment Law are also temporarily suspended:

  • the requirement to agree contract amendments in writing;
  • the requirement to provide seven days' notice to employees notice to take paid holiday (only five days' notice is required during the Emergency Period);
  • limits on the amount of leave that new employees can take during their first year of employment;
  • the general duties of employers in relation to workplace health and safety (although, of course, the requirement to provide medical insurance for sponsored employees still applies); and
  • certain fines or contraventions in relation to provisions of the DIFC Employment Law that have been varied by the Directive.

The relevant provisions of the DIFC Contract Law are also disapplied during the Emergency Period, to the extent necessary to facilitate the implementation of Emergency Measures.

Sick leave

Employees will be entitled to full pay for any period (regardless of duration) of certified COVID-19 related sick leave (i.e. due to contracting the illness or mandated quarantine).  Employees on such COVID-19 related sick leave are also entitled to the following protections: they may not be subjected to any Emergency Measures during that period (unless those measures applied prior to their sick leave); any such sick leave will be excluded from their annual sick leave entitlement; and employers will not be permitted to dismiss that employee for taking excess (i.e. over 60 days) sick leave, unless that sick leave is unrelated to COVID-19.

Visas

During the Emergency Period, on termination of employment employers can defer the cancellation of an employee's residency or sponsorship visa beyond the current 30-day post-termination limit, as long as they continue to provide basic medical insurance and, in the retail, service and hospitality sectors, existing employer-supplied accommodation.  The Directive makes it clear that no other employment rights accrue to the terminated employee during any such visa-extension period, including any contributions into a DIFC workplace savings scheme.

Available employee database

During the Emergency Period, employers will be required to maintain a list of who has been dismissed and made redundant since 1 March 2020 and report those details to the DIFC Government Services Office ("GSO") from time to time.

Subject to giving those employees having given their consent, the GSO will feature their details in an online database designed to assist DIFC Employers with recruitment. It is understood that this will be similar to the Ministry of Human Resources & Emiratisation's recently launched Virtual Labour Market.  The Directive also suggests that the respective authorities will share that information, however this will remain subject to any restrictions on the processing and external transfer of personal data under the DIFC Data Protection Law ("DPL") and its anticipated replacement.

End of service gratuity protection

The Directive protects end of service gratuity entitlements by requiring employers to calculate these payments on the basis of a terminated employees' base salary as at 28 February 2020, even if it has subsequently been reduced between that date and the date of termination.  If since 1 March 2020, an employer has reduced an employee's salary and already paid end of service gratuity on the basis of the lower wage, it must now top up the short-fall.

Data protection and cyber-security

The collection, sharing and processing of personal data of employees (including regarding health, travel and COVID-19 related symptoms) is permitted, subject to any obligations under the DPL and provided that it is done for any reasonable purpose related to the health and safety of the workforce or otherwise required by the authorities.

Employers should notify employees about the monitoring of IT systems, maintain adequate cybersecurity measures and continue to heed to existing obligations under the DPL.  In certain circumstances, employers may be able to avail themselves of some of the exemptions contained in the DPL when processing data without employees' express written consent.

Wrongful trading rules

Wrongful trading rules relating to Directors' personal liability for their actions under the DIFC Insolvency Law have been suspended to ensure that Directors can be confident in making decisions which might otherwise have caused them concern about potentially being personally exposed.

Further measures

The DIFC Authority has reserved the right to issue further directions regarding restricting workforce attendance in the DIFC, key sector employers requiring a DIFC presence, and permit applications.  Employees breaching such requirements will risk immediate dismissal for cause (without notice or payment in lieu of notice).  Employers acting in breach of such measures which will be subject to a fine of up to USD 50,000 - it is not clear whether that includes contravention of this Directive.

If you have any queries relating to the Directive or any other employment or COVID-19 related matter, please contact Kiersten Lucas or your usual Stephenson Harwood Middle East Employment, Pensions and Incentives contact.

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KEY CONTACT

Kiersten Lucas

Kiersten Lucas
Partner

T:  +971 4 407 3993 M:  +971 52 577 7731 Email Kiersten | Vcard Office:  Dubai

Laura Anderson

Laura Anderson
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Emily Aryeetey

Emily Aryeetey
Senior associate

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Ammar El Banna

Ammar El Banna
Senior associate

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