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Exclusive: Implications of COVID-19 on UAE businesses and HR

As more coronavirus cases are detected within the Middle East, UAE employers with globally connected and diverse workforces will need to monitor the impact of the outbreak and take steps to protect their employees and workplace

Companies should consult with their employees, analyze market positions, client behavior and potential developments The majority of companies are not at the stage where they are indicating that pay cuts will be permanent It is essential that business places its trust and loyalty in its employees during these challenging and stressful times

By: Luke Tapp, Partner – Employment at Pinsent Masons

Luke Tapp is a UAE Employment law expert at Pinsent Masons with extensive knowledge about the implications of COVID-19 on businesses and HR and legal professionals.

As more coronavirus cases are detected within the Middle East, UAE employers with globally connected and diverse workforces will need to monitor the impact of the outbreak and take steps to protect their employees and workplace where necessary. 

We had the following exclusive interview with Luke. 

Read: Maintaining a productive and healthy workforce during the Coronavirus pandemic

1- What should UAE employers do in the short to medium term to mitigate the effect of work disruption as a result of the Coronavirus pandemic?

In the short-term, companies should be consulting with their employees, analyzing the market position, client behavior and potential developments of the Coronavirus and impact that any such developments will have on their market and their clients.  Companies can then make policy decisions and manage their workforce based on that analysis and those predictions.  It will certainly not be a consistent approach across all sectors because while some sectors are really suffering at the moment, other sectors are extremely busy, and some industries are predicting an extremely busy period in the second half of the year.

Subject to the market and financial business of each company, the type of short to medium term policies which clients are implementing are the following:

  • Considering whether and to what extent employees’ roles can be undertaken remotely;
  • Transferring staff into different roles within the business;
  • Moving staff around their domestic offices where capacity is required;
  • Reducing working hours for a temporary period;
  • Asking employee to take periods of leave if their business is quiet during this time;
  • Inviting clients to be seconded to third party contacts or clients where there is a greater market demand; and
  • Removing non-essential benefits from employment terms for a temporary period.

Read: Remote working could reduce costs for businesses in the aftermath of covid-19

2- While many companies are resorting to pay cuts, is this a sustainable solution given that the virus is expected to stay with us for a while? Same question with taking annual and sick leaves?

With regards to pay cuts, depending on the sector and the financial strength of the business, some companies are placing temporary or fixed term pay reductions within their business.  Whilst this is unlikely to be a sustainable approach long term, if any such reductions are able to safeguard the company and protect jobs over the next few months and until the market returns, it will benefit the company, the staff and the economy in the longer term.  The majority of companies are not at the stage where they are indicating that pay cuts will be permanent which should provide a degree of comfort to the workforces.

Companies are also implementing mandatory periods of annual leave.  This does have several benefits insofar as it removes a financial liability of the company, will ensure that many of the staff are available to return to work if and when the economy strengthens and begins to normalise and of course should help to protect jobs during this difficult period.

With regards to sick leave, the entitlement to sick leave is 90 calendar days per year. Companies are not allocating mandatory periods of sick leave at the moment, but it will be an option for employees to take should they contract COVID-19 or any other illness during this period.

Read: Every organization has its role to play in combating the Coronavius crisis

3- What type of companies need to stay open and not distance themselves from both employees and customers? What safety procedures need to be in place in that case?

The UAE government has encouraged the majority of businesses to work from home where possible with the exception of certain sectors only, which are the following:

  • Health sector
  • Pharmaceutical sector
  • Food Retail outlets (including animal feed)
  • Industrial and Manufacturing
  • Construction, Contracting and Building Materials
  • Security Services
  • Logistics & Delivery Services
  • Supply Chain
  • Workshop
  • Cleaning Services
  • Cash transport
  • Banking sector

There are no express guidelines regarding particular policies that should be put in place although making changes to social distancing and hygiene will of course be best practices for those organisations.

4- What is the best way for businesses and their staff to manage the avalanche of information and misinformation related to COVID-19, legal rights and work at home obligations? 

The confusion within the market is in part related to the speed at which the Authorities are moving to tackle and safeguard business and the residents of the UAE.  The information and international best practice approach to managing COVID-19 is changing on a daily basis and we are fortunate that the UAE Authorities have been able to adopt such a fluid and responsive approach to tackling the virus. Therefore, the policy and advice to business and residents will be updated and amended on a day to day basis and it is important that business leaders and HR managers are also adaptable to those changes. 

The best way for businesses to approach this situation is to listen to their employees and their clients and engage with them to understand the market demands for the next week, the next month and the next six months, and make policy decisions based on that information and government guidance.  It is essential that business places its trust and loyalty in its employees during these challenging and stressful times.  The economy will recover, and the markets will return and those business who support their staff while also protecting their business over the next few months will be the strongest companies that emerge from this epidemic.

5- While travel is restricted, can employees choose where to work from, no matter how remotely removed from office location?

Employees can work remotely during this period provided they have the agreement of the company.  For some roles, remote working may be impossible.  However, where it is possible to facilitate remote working, this is certainly the best approach to protect health and safety of the employees and comply with the government recommendations.