All you need to know about the unpaid leave

What is the law that allows an employer to apply unpaid leave?

Ministry of Human Resources and Emiratisation has issued Ministerial Decree no. 279 of the year 2020 regulating the labor relations at private-sector establishments during the period combating the spread of COVID-19. Article no. 2 of the ministerial decree regulates the unpaid leave as “one out of five” measures that the employer can take in agreement with the employee.

Under what circumstances the employer can enforce the unpaid leave?

The ministerial decree specifies that the measures are decreed for the establishments impacted by the COVID-19 and that desires to reorganize its labor relations. So, it is not a free-for-all invitation and any establishment that was not impacted should not apply these measures.

Can the unpaid leave apply to all the employees including the UAE nationals?

No. The unpaid leave including all the measures mentioned in the ministerial decree no. 279 of the year 2020 is not enforceable towards the Emirati employees as the Ministry of Human Resources and Emiratisation has issued a separate decree no. 280 regulating their status during the period combating the spread of COVID-19.

What is the correct way applying the unpaid leave?

The ministerial decree specifies that the measures are decreed to be taken as follows:

• In a gradual way. So, the employer MUST apply the measures gradually. This means the employer must apply the work from home first, then escalate to providing the employee with paid leave, and then afterwards the employer is allowed to apply the unpaid leave as the third measure to be taken.
• In agreement with the employee. So, the employer MUST get the approval of the employee. This, of course, requires a meeting to explain that the company is indeed impacted and it is for the best of the business sustainability to take such measures.

What are the rights of the employee who is put on unpaid leave?

The employee put on unpaid leave should be able to maintain the following:

• the residency and work permit under the company or employment of the employer,
• the medical insurance card remains valid,
• the right to all his legal entitlements counting the period of the unpaid leave till the last day of his employment for the calculations of the gratuity and end of service entitlements.

Does the employer have to pay the allowance during the unpaid leave?

No. The employer is not obliged to pay any of the allowances during the unpaid leave. All the payments that fall under the amounts defined as “Wage” is not to be paid during the unpaid leave.

Can the employee continue to live in the company accommodation?

Yes. If the employee is provided with company accommodation or staff residences as the case for labor camps for the construction companies or the hotel's staff accommodation, they should remain living there during the unpaid leave period or until the employment relationship is terminated.

Isn’t it mentioned in Article 3 of the same decree that the employer shall continue to pay the employees the housing allowance and all other dues (except the salary)?

No. That is not correct for the following reasons:

• Article 3 of the ministerial decree is specific for the employees who are made redundant and not for the employees who are put on unpaid leave.
• The word “residence” mentioned in the article refers to company accommodation and not to the housing allowances.
• The statement “excluding the wages” mentioned in the article refers to the total salary including the allowances where the article is clear that the employer has no obligation towards such payment.

What can I do if my employer is taking advantage of the situation by terminating me or by putting me on unfair unpaid leave while the company is not impacted?

You will have the right to file your complaint to the Ministry of Human Resources and Emiratisation or through the relevant Free Zone Authority against your employer and explain your situation. If the employer was found working against you for its benefit and not in line with the ministerial decree regulations whether not applying the gradual measures, or not taking your consent for such measures, you will have the right to register your complaint and the right to claim all your legal entitlements as well as the relevant compensation for the harm caused by your employer’s actions.