May 13, 2020

COVID-19 Middle East: Employment update on new government initiatives

Are you finding it challenging keeping up to date with the flurry of requirements and legislation being issued by the authorities of late? You would be forgiven if you are given the rapid pace in which changes are being implemented in response to the novel coronavirus (COVID-19) outbreak. To ease the burden, we set out below a summary of the recent legislative and general changes requiring employers' attention across the GCC. Clyde & Co will regularly update this publication as matters progress.

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UAE

Ministry of Human Resources and Emiratisation Resolution No. 281 of 2020 on remote working in the private sector during the application of precautionary measures to limit the spread of COVID-19

This resolution limits the percentage of an employer's workforce that can physically continue to work from the employer's premises to 30% (companies performing certain activities are exempt from this requirement, such as, food and health).  Companies are also required to limit the number of customers visiting their premises to 30% of their seating capacity and to strictly observe health and safety precautions.  For those employees working on the premises, employers are required to implement protective measures, including providing screening devices on the premises to take employee temperature and check symptoms of the virus twice a day, and refer suspected cases to the health authorities.

For those employees working remotely, employers priority should be given to pregnant women, those aged 55 and above, those with disabilities, respiratory or chronic diseases and female workers who are mothers of children in grade 9 and below.  Employers are also required to comply with the temporary guide for remote working in private sectors which requires, for example, that the employer provides the relevant technical equipment to facilitate home working and determining mechanisms for the management of remote working.

Ministry of Human Resources and Emiratisation Resolution No. 280 of 2020 establishing a committee to monitor  the stability of the conditions of locals working in the private sector

This resolution is tasked with reviewing measures for promoting employment of nationals in the private sector which includes:

  • Reviewing the process for recruitment and appointment of nationals to roles;
  • Reviewing information provided in the exit interviews submitted when a national's employment is terminated; and
  • Making recommendations to the Minister for measures to be introduced to promote stability of employment for nationals.

Ministry of Human Resources and Emiratisation Circular No. 4 of 2020 concerning the stability of the national workforce conditions in the private sector during the period implementation of precautionary measures to limit the spread of the Novel Coronavirus

The circular restricts the ability to restructure UAE national workforce by requiring certain steps to be followed, including: (i) notifying MHRE through "Tatween" of its desire to reorganise; (ii) refering the matter to the committee established pursuant to Resolution No. 280 of 2020 (see above); (iii) adopting alternative measures as discussed and proposed by the committee; and (iv) not proceeding with a restructure until alternative measures by the committee have been implemented, as agreed with the employee.

Ministry of Human Resources and Emiratisation Resolution No. 279 of 2020 concerning the employment stability in private sector establishments

The resolution encourages employers to consider alternative means of reducing staffing costs rather than terminations and makes clear that certain measures should be with an employee's express written agreement.  Pursuant to the resolution, employers may mutually agree any of the following options with their non-national employees:

  • Remote working
  • Paid leave
  • Unpaid leave
  • Temporary reduction of salary
  • Permanent reduction of salary

The resolution envisages that the measures will be implemented gradually in turn, starting with remote working and ending with permanent reduction in salary.

The resolution also introduces a concept of 'sharing employees' whereby employers with a "surplus" of non-national employees may register them on the ministry's newly established 'Virtual Labour Market System' to enable such employees to work for other employers.  The current employer will remain the primary employer and be liable for the employee's minimum entitlements (save for salary) under the law (i.e. leave, allowances, medical insurance etc.).

Pension The General Pension & Social Security Authority (GPSSA) stated that it would allow subscriber private sector companies to defer the payment of subscriptions to the GPSSA for their staff for three months starting as of March and ending in May 2020 (subject to possible extension).

Daily curfew

Dubai has relaxed it's 24 hour curfew.  The entire UAE is now imposing a daily curfew from 10pm-6am.  Individuals are required to stay at home during such time unless they work within vital sectors.

Restriction of movement

Abu Dhabi has issued a notification prohibiting the transfer outside the Emirate of Abu Dhabi and likewise prohibiting the transfer of workers from other emirates into Abu Dhabi.  The notification has been in effect from 11 April 2020.

Dubai Municipality has issued a statement on 15 April 2020 prohibiting the transport of labour workers to areas outside of Dubai and from another emirate into Dubai.

Cabinet Resolution No. 17 of 2020 Concerning the Issuance of the List of Violations of Precautionary Measures, Instructions and Duties Imposed to Reduce the Spread of COVID-19
 
The resolution prohibits violation of any precautionary and preventative measures, instructions and duties issued by the Ministry of Health and Prevention, the Ministry of Interior and the National Emergencies, Crisis and Disaster Management Authority in relation to maintaining health and safety to prevent the risk of spreading COVID-19 and grants such authorities the power to  impose administrative penalties of between AED 500 and AED 50,000 which may be doubled in the case of reoccurrence, and permits further sanctions in the event of a third breach.   

Attorney General Resolution No. 38 of 2020 on the list of violations and administrative sanctions in violation of precautionary measures, instructions and duties applied to limit COVID-19

This resolution sets out specific penalties for breaching the above resolution (17 of 2020), including a fine of AED 50,000 for failing to adhere to home quarantine instructions. Other penalties include a fine of AED 2000 for those "leaving home for unnecessary reasons, or for any purpose other than work or purchase of basic needs" and a fine of AED 1000 for "failing to wear medical facemasks in closed places or failing to observe the safe distance between individuals".

Dubai Department of Economic Development (DED) announcement on remote working

The DED has mandated private sector companies to implement working from home for 80% of its workforce. 

Free Zones

The DIFC Authority, The Dubai Development Authority and Jebel Ali Free Zone Authority have all mandated remote working systems in line with DED announcements.

ADGM has advised employers to ensure that no more than 30% of the workforce work from the employer's registered office (save for, supermarkets, grocery stores, pharmacies, hospitality, food establishments (delivery), security, maintenance, cleaning, infrastructure management and constriction). 

Communicable Diseases Law

This law has been amended to include COVID-19 meaning that individuals are under a personal duty not to transmit the disease (even if they are asymptomatic), not to travel if they suspect they have it, to seek medical treatment, and not to deliberately transmit the disease, which could mean going out of their home unnecessarily. Penalties vary but can go up to 5 years imprisonment and AED 50,000 to 100,000 fine. Individuals are also subject to penalty if they break quarantine.

Direct supervisors at work are under a duty to order employees displaying COVID-19 symptoms to seek medical assistance and if they do not to report their condition to the authorities.

KSA

Ministry of Human Resources and Social Development (MHRSD) mandates:

 

Additional leave

  1. 14 days' paid leave (additional to all usual leave entitlements under the labour law) must be granted to employees in categories which are identified as high risk with regard to COVID-19. These include those with autoimmune disease, cancer, respiratory illness, chronic illnesses and pregnant women or breastfeeding women as well as employees aged 55 years and above.  Such employees are not required to work from home during this 14 day period;
  2. Employees outside of the Kingdom due to the suspension of commercial flights are regarded as being on official leave over and above the minimum under the Labour Law (the Ministry has not stated whether this should be paid or not but merely that its status is that it is authorised leave); and
  3. Employees ordered to quarantine (even if self imposed) for 14 days are on official leave over and above that under the law (the Ministry has not stated whether this should be paid or not but merely that its status is that it is authorised leave).

Work from home

MHRSD instructed private sector establishments on 18 March 2020 to suspend work at their main office / headquarter and instead activate work from home (WFH) procedure.  Companies are also required to reduce the number of employees working in their branches, offices and other facilities to a maximum of 40% of the headquarter (HQ) workforce.  The WFH initiative was initially for 15 days but is now understood to be until Ministry of Interior and MHRSD advise otherwise.

Certain sectors are exempt from the above requirements, including vital infrastructure sectors such as water, electricity and communications, and companies involved in food, medicine, and their supply chains as well as logistics, including provision of such services to consumers. MHRSD will issue the exemption on application.

Sectors still operating work places are required to adhere to the following:

  • Maximum of 40% of the workers should attend the premises;
  • Employers with a workforce of more than 50 employees must introduce mandatory temperature checks;
  • Ensure that sufficient space is available between workers in the workplace and in their accommodation;
  • Close all health clubs and nurseries located at the company’s HQ; and
  • Require all employees to disclose if they exhibit symptoms of high temperature, coughing or shortness of breath, or have mixed with an infected or suspected case of COVID-19.

Curfew

A 24 hour curfew remains in place in Mecca city, and a few other isolated districts, but has been partially lifted elsewhere in KSA, with a curfew now in place from 5pm to 9am daily.  Some sectors, such as food, healthcare, transportation, ecommerce, accommodation  services, energy, financial, telecom and water are exempt.

Furlough programme for KSA nationals

On 3rd April KSA announced a furlough programme for the private sector, current details of which are:

  • The employer may apply to the General Organization for Social Insurance (GOSI) to cover 60% of its KSA national employees' salaries up to a maximum of SAR 9,000 per employee through the SANAD programme (unemployment benefit programme).  If the employer has 5 employees or less, then all of them will be covered, otherwise up to 70% of the employer's KSA national workforce may be covered through this initiative.
  • The payments will be made for three months: May, June and July 2020.  The employer does not have to top up the employees' salaries during this period to 100% of what they would normally be.  The employee does not have to work during this period when the employee is receiving funds directly from the SANAD programme through GOSI.
  • The KSA employee must have been registered with GOSI prior to 1 January 2020.
  • The employer must be able to demonstrate that it is in a sector impacted badly by COVID-19.   The following sectors are exempt from this programme: financial services (including banks, insurance companies, exchanges), communications, food retail outlets and food companies.
  • The employer must pay wages to all other employees, both KSA nationals and foreign nationals during this period.
  • The employer must have paid its employees their complete and accurate salaries during  the first quarter of 2020.
  • The employer must undertake that once the three month period is over (end of July), the employer will resume paying such employees their salaries  in full.
HRDF programme to supplement salaries Whilst not strictly a furlough programme this programme was announced on 2nd April 2020 and permits private sector employers to apply to the HRDF for support to pay up to 50% of their KSA nationals salaries subject to lower and upper limits on salary and with conditions applying.
6 April 2020 – Amendment of the KSA Implementing Regulations to the Labour Law

Ministerial Resolution equivalent to 6 April 2020 amends the implementing resolution to the Labour Law (issued in January 2019) by adding a new clause 41 providing:

  1. In the event the Kingdom adopts measures as recommended by an international organisation to provide for adjusted working hours or to avoid a situation falling under Article 74 (5) of the Labour Law which provides for termination of employment by reason of force majeure, an employer will be able to agree any of the following measures with an employee for a six month period following the introduction of such measures:
     

    a. Reducing the employee's salary in correspondence with a reduction in the employee's working hours;

    b. Putting the employee on annual leave as part of his annual leave entitlement;

    c. Putting the employee on exceptional leave in accordance with Article 116 (unpaid leave) of the Labour Law

  2. Termination of Employment following the implementation of such measures will not be justified if the employer received assistance from any Government programs during this period;
  3. Nothing in this resolution prevents or inhibits the employee's right to terminate his employment contract. 
  4. KSA has issued a resolution amending Article 27 of the implementing resolution to the Labour Law, allowing KSA national workers to work on a part time basis and on an hourly basis for more than one employer providing the total number of hours worked is less than full time hours normally worked in such establishment.  Various conditions apply.  

Other initiatives announced

  • The Human Resources Development Fund will allocate 5.3 billion to support the private sector to employ and train KSA Nationals.
  • Exemption from expat levy for those employees who's Iqama has expired prior to 30 June 2020.  Their Iqama will be extended for a period of three months without charge.
  • Refund of fees for new visas which have been unused during the ban.
  • Employers may extend the exit re-entry visas that have not been used during the ban.
  • Suspension of recruitment fines during this period.
  • Temporary suspension of the wage protection system.
  • Allowing KSA nationals to immediately count towards Nitiqat.
  • Widening of Ajeer system to apply to all sectors and enabling employees to work for other employers.
  • Any individual (national or foreign and illegal residents) will be entitled to receive free medical treatment for COVID-19 at a government hospital.
KUWAIT

Curfew

Kuwait is currently enforcing a daily curfew prohibiting individuals from leaving their homes between the hours of 4 pm and 8 am.

The deputy Prime Minister and Interior Minister and Minister of State for Cabinet have been stated that anyone caught breaking the coronavirus curfew will potentially face a prison sentence of up to three years and a fined of 10,000 Kuwaiti dinars ($32,000).

Closure of public places

All schools, cinemas, exhibitions, stores, shopping malls, gyms, sports complex, salons, barbershops and all outlets deemed to be high risk for COVID-19 exposure have been closed. Certain establishments have been excluded from closure, including restaurants, food and beverage shops (although they are only permitted to sell food and drinks for take away or delivery), laundries, repair shops, currency exchanges, pharmacies, gas stations; hardware, cattle feed shops, and administrative offices.

Other

No other special measures have been introduced for the private sector but the Kuwaiti labour law permits an employer to put an employee on paid leave in accordance with its provisions. The Government has also stated that it is reviewing potential actions with regard to wages during this period. The Minister of Social Affairs & Labor (MOSAL) has the option to compel employers to pay wages and MOSAL can use the guarantee money deposited by employers with the MOSAL for such payment. We understand that government sector employees have been paid their salary ahead of time and Kuwaiti citizens have been informed that they can postpone their loans without interest and their personal credit card for 6 months. Company loans have also been deferred for 6 months without payment of interest for the delay. The government is currently considering an economic stimulus package that will help people overcome the harsh impact on the economy by the COVID-19 shutdown.

BAHRAIN

Work from home encouraged

The government has recommended, but not mandated, that companies implement work from home initiatives. Whilst there have been no private sector workplace suspension, consultancy offices are prohibited from having clients attend their offices.

Potential curfew

A curfew proposal has been put forward but has not yet been implemented.

QATAR

Work from home

The government has mandated that companies implement working from home for 80% of its workforce and the remaining 20% of the workforce is only permitted to work between the hours of 7am-1pm for the next two weeks.
Financial Assistance
 
The Qatar Government has announced that it has set up a guarantee scheme for private sector employers affected by the COVID-19 impact.  Through the scheme, employers who qualify are able to apply for finance to cover up to three months' employee payroll obligations and up to three months of real estate rental fees.  Conditions apply, including the requirement to be incorporated under the Ministry of Commerce and Industry and not operate within the real estate, construction and contracting sectors.
Ministry of Administrative Development, Labor and Social Affairs (MADLSA) statement
 

The MADLSA has published a note (Guidance Note) on their website which provides that employers and employees are required to adhere to various conditions.  We set out the key requirements:

  • All employees in isolation, quarantine or receiving treatment will still be paid their basic salary and receive their allowances irrespective of whether they are entitled to sick leave benefits. This is above the statutory minimum position in the Qatar Labour Law.
  • Employers have the right to terminate employment contracts, however, the termination must be carried out in compliance with the Qatar Labour Law (including the notice period and the payment of all pending entitlements including a return ticket to their home country).
  • Employers may mutually agree that workers take unpaid leave or use their annual leave if the business has been halted and the worker is not assigned any work. However, employers must continue to provide all other benefits, including accommodation and food.
  • If an employee is out of the country and unable to return to Qatar, the employer and the employee should discuss working conditions and benefits. The employee is entitled to refuse any adjustment to the contract. In case of termination of employment, this must be carried out in full compliance with the Qatar Labour Law.
  • A telephone hotline has been set up to report any violations, which may also be submitted via text message.

The Guidance Note has been issued to assist workers, and whilst it does not formally amend the Qatar Labour Law, in the event of a complaint, it is likely that the MADLSA will apply the position set out in the Guidance Note.

Other initiatives
  • All public places have been closed and public gatherings stopped (including the Cornich, public parks and beaches).  All shops and bank branches in shopping malls have also been closed except food stores and pharmacies.  Families must not share vehicles or walk with other families.
  • ​Ministry of Education is to review and determine reductions and/or waivers in schools fees. 

Economic stimulus package

  • Stimulus packages at an estimated value of QAR 17 billion are being invested into the private sector.
  • All loan instalment payments for individuals and repayment obligations on private sector entities have been postponed for a grace period of six months (subject to renewal).
  • Exempting food and medical goods from customs duties for a period of six months (subject to renewal).
  • Exempting the hospitality and tourism, retail, industrial and commercial sectors from all electricity and water fees for a period of six months in exchange for tenants being relieved of electricity and water payments.
  • Relieving all obligations for industrial sector entities to pay rent for the next six months.
  • Government investments in the stock exchange will increase by QAR 10 billion.
  • Additional liquidity will be provided by Qatar Central Bank to all banks operating in Qatar.
  • General Tax Authority grants extension on the filing of tax returns.
  • Free zone authorities grant tax and rental payment relief to all entities.
  • Encouraging commercial complexes to grant rent relief to tenants.

Corporate, immigration and social support

  • Offering return visas for all Qatar residents whose Residence Permits have expired whilst abroad.
  • Greater flexibility in relation to the renewal of government licences.
  • Greater flexibility and relief for university and school students in relation to academic examinations (examination guidelines being relaxed).
  • Certain government fees relating to incorporation of companies in Qatar are being waived. Please note however that this was being done prior to the COVID-19 outbreak to encourage business.
  • Government entities are operating online to accommodate social distancing requirements.
  • Ministry of Interior is providing alternative accommodation to individuals previously living in areas now on lockdown due to COVID-19 outbreak.
  • Establishing a 24-hour hotline providing medical and social advise in relation to COVID-19 outbreak.
OMAN
Working from home initiatives

Government employees are currently working 30%.

The Ministry of Manpower has issued notifications to the private sector requesting the following:

  • emphasising the importance to reduce the number of workers in the workplace to the minimum number required for basic work progression;
  • requiring employers to take necessary health and safety procedures and measures that provide the appropriate environment for its workers; and
  • that they direct their foreign national employees to remain at home after working hours, on vacation and weekends and not go to public places unless necessary and stop all labour gatherings.
Reducing staffing costs

The following applies with respect to Omani national employees:

  • Their employment should not be terminated.   
  • Private sector companies affected may require their employees to take paid annual leave where they operate in a sector that has been shut down.
  • Affected private sector companies may reduce their employee's wages for a period of three months in exchange for reducing the employee's working hours, providing the employee's annual leave balance has been exhausted.  this must not commence until 1 may 2020.

The following applies with respect to foreign national employees:

  • Private sector companies may mutually agree with their employees salary reductions in writing. 
  • Private sector companies affected may require their employees to take paid annual leave where they operate in a sector that has been shut down.
  • Foreign nationals may be terminated if they are leaving Oman for good and are being paid out in full.

Ministry of Manpower (MOMP) initiatives 

The MOMP has recently announced the following:

  • Residence card renewal fees for non-Omani nationals have been reduced from 15 April 2020 until the end of June 2020 (from OMR 301 to OMR 201). Renewal can be done online.
  • Employers can renew expired work permits for employees currently outside of Oman during this precautionary period without imposing penalties with coordination from the competent authorities. Work permits may be renewed online via MOMP website and must provide proof that the employee is currently outside Oman to be exempt from penalties. 
  • MOMP is extending the period of licenses to recruit non-Omani manpower that expire during this period (this refers to labour clearances). 
  • Work permits may be approved by the MOMP for non-Omani nationals where they would work partially or temporarily. This refers to work permits required for this transition period or if a company requires part time workers to conduct a certain job during these challenging times. The fees would be calculated according to the number of workers that the company wishes to bring to Oman.  
  • Different companies owned by the same shareholders may assign their employees to work in any of their companies at the time of necessity. 
  • It is understood that private sector companies may use the workforce of other companies to work in their facilities, provided they have a written agreement between them. The applicable terms would need to be documented with the individual employee as well.  
  • Private sector companies are being urged to send their foreign national workforce to their home country permanently.
Financial aid for Omani nationals
 

Omani nationals suffering from reduced wages may apply for the following support:

  • Postponing the repayment of bank loans and various financing loans due to them during the wage reduction period, and rescheduling loans repayments without incurring interest and without additional fees.  
  • Postponing the payment of electricity, water and wastewater bills until the end of June 2020, and allowing re-scheduling and instalments payment of the due amounts later.
  • Enrolment onto the National Fuel Support Card (means tested).
Social insurance
  • Private sector employers and Omani national employees are permitted to postpone the payment of monthly PASI contributions due for March to June 2020 provided that these contributions are paid as one payment before the end of June 2020 or in the form of instalments. Agreement from the employee is not a requirement, however, it is advisable. The employer should at least put the employee on notice in writing that this initiative is being adopted. 
  • Fines will not apply for failure to pay contributions for March, April or May 2020 or that result from the delay in registering their Omani workforce or notification of the end of their services during the same period. 

Economic stimulus

  • Restaurants have been granted exemptions pertaining to tourist tax and municipality fees until the end of August 2020 and commercial establishments have been granted exemption from municipality fees until the end of August 2020.
  • Loan installment postponement initiatives and an increase in loans available for small and medium enterprises and Oman Development Bank and Al Raffd Fund to respond positively to Central Bank of Oman’s procedures governing credit incentives.
  • Exemption from rent granted to factories in industrial cities for a period of three months and the government is encouraging commercial landlords to offer relief packages to their affected tenants.
  • Commercial register renewal fees exemption for the next three months.
  • Central Bank of Oman mandated car sales agencies and finance companies to postpone installments/premiums on cars for a period of three months.
  • Discounting fees for handling (loading, unloading) cargo at ports and discounting cargo fees for food and medicine.

If you would like to know more about any of the information contained in this bulletin please contact a member of the Clyde & Co Employment Team