COVID-19 Pandemic: Are Unpaid Leaves and Salary Deductions Illegal?

As the threat of the ongoing coronavirus pandemic looms over businesses in the region, both employees and employers look to the future in fear.

The current economic situation is comparable in severity to the Great Financial Crisis of 2008 in its impact on businesses, financial institutions, as well as markets. 12 years ago, the said crisis caused the shutting down of many businesses in countries across the globe. Layoffs were in the hundreds of thousands jeopardizing the livelihood of thousands of families. Now that a number of countries have halted most economic activities, could the ongoing COVID-19 crisis lead to a similar outcome?

Well, owing to the fact that the situation is still ongoing, it is extremely difficult to make predictions at this point; however, one thing we know for sure is that success in containing the spread of the virus comes at a high economic sacrifice.

On Thursday, China, the first battleground in fighting the spread of the coronavirus, reported no new domestic cases since the outbreak began in Wuhan in December of last year. However, many of the strict policies the Chinese government implemented to contain the spread of COVID-19 came with difficult economic tradeoffs.

All indications reveal that China’s economic slowdown in the first quarter of 2020 will be consequential leaving a deep mark that the country will have to struggle with throughout the rest of the year.

A report by Arabian Business revealed that as this situation continues, we should expect employers to issue more unpaid leaves and deductions in salary, but although according to the Emirati labor law, these economic actions are illegal, they are a better option to many employees than large-scale layoffs.

In light of recent travel bans and limitations on movement, both employees and employers are largely at risk because of the resulting economic slowdown. Yet, the sacrifices should be shared by both parties.

Business owners are responsible for communicating the risks employees face. Everyone knows the situation is turbulent, so pushing it under the rug would not help anyone.

If you are an owner doing cut backs to save job losses, you must lead by example and do cut backs that impact your own livelihood as well. If you don’t, there is a danger that your staff will feel unappreciated and disposable.

No one knows for how long the current situation will continue, but it is worth mentioning that are a number of governments already discussing economic relief. Unlike the economic stimulus package of 2008, which was the target of much criticism from the public because it bailed out the financial institutions that caused the meltdown, these packages are more likely to to be supported by the people as the current instigator was force majeure.

One thing we must keep in mind and is that panic is not the answer, and if we are to prevail over this crisis, we need to find the perfect balance between mitigatable economic policy and empathy for the workforce.

WE SAID THIS: Don’t miss: Everything You Need To Know About The Coronavirus And Its Impact On The Arab World’s Economy.