COVID-19: emergency measures in the DIFC – DIFC employers take note!

Update: the DIFC Authority have now confirmed that the DIFC "COVID-19" directive and the "Emergency Measures" outlined below will not be extended past the original deadline of 31 July 2020. Offices in the DIFC are now fully open for business although the DIFC Authority continue to undertake and enforce strict precautionary measures following Dubai and UAE Government Guidelines. The DIFC Authority have now published a Back to Office Guide.

A new DIFC “COVID-19” Directive was issued on 21 April to enable employers to take emergency measures to protect against COVID-19 from both a health and economic perspective. This article identifies the key changes brought about by the Directive which have taken immediate effect.

Following on from the recent UAE Ministerial Resolution No. 279 of 2020 relating to measures that can be taken by onshore employers to deal with the impact of COVID-19 (the Onshore Resolution), Presidential Directive No. 4 of 2020 was issued on 21 April 2020 by the President of the DIFC for DIFC employers (the Directive). In an unprecedented move, the Directive effectively suspends certain provisions of the DIFC Employment Law, limiting fundamental employee rights and granting the unilateral right for an employer to implement certain emergency measures (Emergency Measures). The Directive takes immediate effect and will subsist until 31 July 2020 or such other date as may be confirmed in a separate directive (the Emergency Period).

The fundamental difference between the Directive and the Onshore Resolution is the issue of employee consent. DIFC employers may implement any one or more Emergency Measure by way of at least 5 days’ written notice to its employees without requiring the employees’ consent.

Emergency Measures that can be taken by employers

The following Emergency Measures can be taken by an employer in the DIFC without employee consent during the Emergency Period:

• the ability to reduce employees’ working hours;
• requiring employees to use annual leave;
• imposing unpaid leave;
• reducing salary, bonus, allowances and other payments due to employees as part of the remuneration package; and
• restricting access to the workplace or requiring employees to work from home and monitoring employee engagement/productivity.

Limited benefits to employees

There are a number of benefits to employees under the Directive which might seek to limit the potential unfairness of having the Emergency Measures imposed upon them:

• any period of sick leave taken as a result of having contracted COVID-19 or having been quarantined by the authorities as a precautionary measure will not count towards the calculation of the maximum 60 working days sick leave allowed under the DIFC Employment Law and they will be entitled to 100% of their wage for that period (and must not be subject to Emergency Measures that did not apply prior to their sick leave);
• the calculation of gratuity/”Qualifying Scheme” payments will be based on their basic wage as at 29 February 2020 for the duration of the Emergency Period, even if their basic wage has been reduced from 1 March 2020 (as a result of an Emergency Measure or otherwise);
• if an employee is terminated, an employer may defer the cancellation of the visa for the Emergency Period, in which case the employee will be entitled to the following until their residency visa has been cancelled:
  • continue to receive basic medical insurance;
  • remain sponsored by the employer; and
  • if working in the retail, service or hospitality industry and if the employee is dependent on the employer to provide accommodation, the right to remain in that accommodation. However, the employee would not accrue “Core Benefits” or any other benefits during this period (such as employer payments into a “Qualifying Scheme”).

DIFC Available Employee Database

Employers are required to maintain a list of its terminated employees and employees that are surplus to current needs which must be updated and provided to the DIFC Government Services Office. Employees who consent will then appear on the DIFC Available Employee Database. Employers who are looking for new employees can then search and select suitable candidates.

Workforce Restrictions

The Board of the DIFC Authority may also issue the following directions with respect to workforce restrictions:

• restricting workplace attendance or restricting the percentages of employees who may physically attend the workplace;
• specifying vital roles for employers or key sectors of employment that require a presence in the DIFC during or after working hours;
• issuing permits that may need to be applied for; and
• setting out which directives must be complied with which have been issued by UAE Health or Government Authorities.

If an employer breaches any of these directions then the employer will be liable for a fine up to $50,000. Employees who do not follow the requirements of their employer may be subject to immediate dismissal (dismissal for “cause” under the DIFC Employment Law).

Most employees in the DIFC are now working from home, however, these directions will be key to employers who are now making preparations for a return to work. Once these directions are issued it will be very important for both employers and employees to understand the directions and keep up-to-date.

Privacy and Cybersecurity

With respect to employees who are working remotely, employers should notify employees that IT systems and equipment may be monitored to prevent misuse of employer property. Employers who fail to notify employees must be able to prove the purpose and benefit of such monitoring during remote working to the extent it outweighs the privacy rights of the employee. Employers must also ensure that adequate cybersecurity measures are in place for remote working.

We would therefore recommend that employers provide a notification to employees about monitoring and also check their cybersecurity on employees’ remote computer systems.

The Directive also references the DIFC Data Protection Law. Employers are expressly given the right to collect, process and share personal data of employees (including information relating to travel, health and COVID-19 symptoms) related to health and safety or as required by the authorities.

Removal of employer’s health and safety obligations

For employees working remotely, employers have no statutory duty to comply with certain health and safety related obligations contained within the DIFC Employment Law (e.g. providing a safe and sanitary work environment) meaning that an employer would have no liability for any injuries sustained by an employee in his home “work” environment sustained while “at work”.

Other key changes to director duties

While not strictly employment related, the Directive suspends certain directors’ duties relating to wrongful trading set out in the DIFC Insolvency Law during the Emergency Period, meaning that a director can make decisions he considers to be in the best interests of the company due to the COVID-19 situation without fear of personal liability under the DIFC Insolvency Law.

Conclusion

Clearly, the primary purpose of these measures are not only to protect against the spread of COVID-19 but also to limit the burden on employers who have been adversely affected by the economic effects of COVID-19, in order to sustain business and hopefully reduce the number of employees who are terminated in the DIFC during this period. Employers in the DIFC will need to understand the new requirements under the Directive and also keep up-to-date with all future developments, particularly with respect to directions from the Board of the DIFC Authority and the employer’s preparations for a return to the office once COVID-19 restrictions start to be relaxed.

For any queries relating to this and other general DIFC or UAE employment and COVID-19 related matters, please do not hesitate to reach out to the contacts listed on this page.