Coronavirus in UAE: Can my employer reduce my salary without a new contract?

An employer may choose to temporarily reduce the salary of its employee.

Question. I am employed by a company and working on a construction project which falls under the classification of a vital sector. My employer has stated that it shall temporarily reduce my salary by 25 per cent for the current month. However, my employer has not mentioned the duration till when the temporary reduction of salary shall remain. A new contract with amended terms has not been issued to me. I am currently working full time on the construction project with no reduction in my attendance days and my workload has remained the same. Is my employer permitted to reduce my salary?

Answer
At the outset, we assume that you are employed by a private sector company incorporated in the mainland of UAE and you are not a citizen of the UAE. In view of the coronavirus pandemic and the precautionary measures taken to prevent its spread, the Ministry of Human Resources and Emiratisation (the Mohre) has issued Ministerial Resolution No. (279) of 2020 concerning the employment stability in establishments of the private sector during the application of precautionary measures to control novel coronavirus outbreak, (the 'Ministerial Resolution').

Pursuant to your query, it may be noted that an employer affected by the precautionary measures taken to contain Covid-19 may choose to temporarily reduce the salary of its employee. This is in accordance with Article 2 (4) of the Ministerial Resolution, which states:

"Article 2:
Establishments affected by the precautionary measures referred to above, who wish to reorganise its employment relations, shall take the following measures gradually, and in agreement with the non-national employee, as per the following:
1. Apply a remote working system.
2. Granting a paid leave.
3. Granting an unpaid leave.
4. Temporarily reducing salary during the mentioned period.
5. Permanent reduction of salary."
However, for your employer to temporarily reduce your salary during the application of precautionary measures, you and your employer shall have to (i) agree to a 'Temporary Additional Addendum' to the original employment contract, as per the template attached with the Ministerial Resolution which shall end upon the duration mentioned in the 'Temporary Additional Addendum' or upon the end of the period of applying the precautionary measures; (ii) renew the 'Temporary Additional Addendum' in agreement between you and your employer; and (iii) two copies of the 'Temporary Additional Addendum' shall be executed, one copy being in your possession and the other being in the possession of your employer and your employer shall be obliged to present the 'Temporary Additional Addendum' to the Mohre when required. This is in accordance with Article 5 of the Ministerial Resolution, which states:
"Article 5:
Establishments that wish to temporarily reduce the salary of a non-national employee during the mentioned period shall take the following actions:
1. Conclude a 'Temporary Additional Addendum' to the employment contract between both parties, in accordance to the template attached to this Resolution, provided that it shall expire at the end of its term or enforceability of this Resolution, whichever comes first.
2. Renewing the Addendum referred to in Clause 1 of this Article shall be in agreement between both parties.
3. The Addendum referred to in Clause 1 of this Article shall be executed in two copies, each party holding a copy, and the employer shall commit to present it to the Ministry whenever asked."
Whereas you have mentioned that a new contract with amended terms has not been issued to you, it is construed that your employer has not abided by the procedures stipulated under Article 5 of the Ministerial Resolution for temporarily reducing the salary of its employees.
Based on the aforesaid provisions, your employer may not be permitted to reduce your salary temporarily. In this regard, you may file a complaint against your employer with the Mohre concerning the non-compliance with the procedures mentioned under Article 5 of the Ministerial Resolution for the temporary reduction of your salary. However, if your employer has been affected by the precautionary measures being taken to contain Covid-19 and if your employer adheres to the said procedures and chooses to temporarily reduce your salary; provided you and your employer mutually agree to the temporary reduction of your salary, the reduction may be permitted.
Know the law

An employer affected by the precautionary measures taken to contain Covid-19 may choose to temporarily reduce the salary of its employee

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

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