While the financial impact of COVID 19 has affected almost every sector across the world, the hospitality sector has been one of hardest hit. This sector has borne the brunt of reduced travel together with event and booking cancellations. We look at the key employment related considerations faced as a result.
To address the immediate impact of the crisis, hotels were one of first sectors to take steps with the workforce in order to control costs and help ensure future sustainability. Hotels in the UAE put various protections in place including requesting staff to take periods of unpaid leave, utilize remaining annual leave and freezing of recruitment programs.
Such moves were supported by a Resolution Number 279 of 2020 (Resolution) issued by the UAE’s Ministry of Human Resources and Emiratisation (MHRE) intended to stabilize employment amidst the pandemic. The resolution (which applies only to non-UAE national employees, and is still in effect to date) covers measures that an employer may take to reduce employment-related costs caused by the outbreak.
Irrespective of the above the financial impact of the crisis and local lockdown requirements have been such that many hotels have been unable to maintain a pre–COVID-19 sized workforce and have been forced to reduce headcount.
There is a risk of arbitrary dismissal claims arising from redundancies (maximum exposure in the event of a successful claim is capped at three months’ salary on top of statutory and contractual payments). Further, additional considerations arise by virtue of the resolution in connection with employee dismissals. In this regard, where an employee employment is terminated, the resolution imposes an obligation on the employer to pay all entitlements (excluding wages) until:
- The employee leaves the UAE.
- The employee transfers to a new employer.
- The measures put in place by UAE government in terms of employment stabilization due to the COVID19 outbreak are lifted.
No official definition of “entitlements” is available. However, the resolution contains an express reference to provision of accommodation. Consideration and management of ongoing entitlements is therefore a factor in any redundancy program.
Recovery and renewal
Hotels are now faced with a new set of challenges from re-staffing further to implementing cost-saving measures and redundancies and adapting to and upskilling employees in relation to the new guidelines.
Hotels need to plan for the long haul and ensure that robust policies are implemented to safeguard employees and guests and protect the business. Employees displaying COVID-19 symptoms are prohibited from accessing hotel premises. Hotels should be prepared to accommodate suspected cases safely, particularly considering employees may not be able to return to their shared company provided accommodation.
Suspected but unconfirmed cases give rise to questions with regards to employment entitlements during periods where employees are unable to work but are not confirmed sick. Where an employee’s role is capable of being performed remotely, there are unlikely to be any issues as the employee could simply perform his or her duties from home. However, where an employee’s role requires physical presence in the workplace, an employer may consider:
- Annual leave: The Labour Law expressly provides that an employer may fix the dates of an employee’s annual leave, subject to certain conditions being complied with. A company could mandate that days spent in quarantine must be taken as annual leave.
- Unpaid leave: An employee can be placed on unpaid leave with consent. – Sick leave: If the employee is not sick (i.e. a confirmed COVID-19 case), strictly speaking, sick leave would not apply. However, there is no reason why a company could not apply sick leave to quarantine periods if it wished to do so.
Employers should balance managing costs with encouraging employees to proactively come forward if they suspect or are concerned they may have contracted the virus.
Beyond the workplace
Some employers with large workforces have recently looked at the extent to which employee behavior can be managed outside the workplace.
There is clear rationale to the argument that exposure to COVID-19 related risks outside the workplace presents a risk to guests and colleagues in the hotel (thereby causing potential harm to the business). Some companies are taking the decision to implement HSSE guidelines that employees must follow both in and outside of the workplace.
On the face of it, there is nothing in law that would prohibit a company from doing this – particularly where the guidelines follow government regulations in any event. However, labor law prohibits disciplinary action being imposed on an employee for an act committed outside of the workplace “unless such act is connected with the work, the employer or the responsible manager”.
The matter of penalizing employees for “offences” committed outside of the workplace is untested in practice. However, in our view, in order for a policy to this effect to have the best prospects of being upheld, it must make clear that the measures are in place to promote health and safety and the exceptional circumstances in which business is currently operating.
Legal advice should be taken when implementing such policies. The Department of Tourism and Commerce Marketing (DTCM) has recently described the hospitality and tourism sectors as “rapidly rebounding”. This is clearly great news for the sector – and a testament to efforts hotels have made in making their premises safe.
As this trend continues, health and safety should remain front of mind. Hotels must ensure that they can agilely adapt to new regulations and manage the workforce accordingly.
This article was originally published in the 11 September 2020 edition of Hotelier Middle East and is reproduced with permission. The original article can be found here.