UAE Covid: One-sided salary cuts by employer not valid

Question: My employer in Abu Dhabi asked me to acknowledge a pay reduction of three months — January-March 2021. Since pay reduction is reviewed quarterly, we have been asked to acknowledge any further extensions throughout 2021. Is this legal? If I don’t sign the agreement, is it treated as acceptance keeping in mind that ‘silence is acceptance or acknowledgement’?

Answer: Pursuant to your queries, we assume that you are employed in a mainland company based in Abu Dhabi and your employer is affected by the pandemic.

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Therefore, the Ministry of Human Resources and Emiratisation (the MOHRE) had issued Ministerial Resolution No. (279) of 2020 Concerning the Employment Stability in Establishment of the Private Sector During the Application of Precautionary Measures to Control Novel Coronavirus Outbreak (the Ministerial Resolution No. 279 of 2020) and the provisions of the same may be applicable.

An employer in the UAE may apply the provisions of Ministerial Resolution No. 279 of 2020 if it is affected by the pandemic and may reduce the salary of its employees as agreed with the employee.

This is in accordance with Article 2 (4) & (5) of the Ministerial Resolution No. 279 of 2020, which states: “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:

“4. Temporary reduction of salary during the mentioned period.

“5. Permanent reduction of salary.”

Based on the aforementioned provision, you may have signed the ‘Temporary Additional Addendum’ agreeing on the reduction of your salary for the period January to March 2021. This is in accordance with Article 5 (1) of the Ministerial Resolution No. 279 of 2020, which states: “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.”

It should be further noted that an employer may also reduce the salary of its employee permanently upon agreeing with the employee and on approval by the MOHRE.

This is in accordance with Article 6 of the Ministerial Resolution No. 279 of 2020. The aforementioned provisions of law are still applicable as the MOHRE has not withdrawn it.

However, you are not required to agree with your employer for reduction of your salary for the period April to December of 2021.

If you do not agree in writing for reduction in salary for a future unspecified term, it may not be treated that you as an employee have accepted the salary reduction by your employer.

The MOHRE only accepts salary reductions if the employer and employee both have signed the ‘Temporary Additional Addendum’ for temporary reduction of salary or ‘Amend Contract’ for permanent reduction of salary of the 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.