Wages set to soar for Eid 24-hour shopping

Retailers across Dubai face a soaring wage bill during the 24-hour Eid Al Ahda shopping festival as employment lawyers warn staff working overtime must be paid up to 50 per cent more.

For three consecutive weekends over the Eid period, beginning on Thursday, stores are expected to open in malls from 10am on a Thursday and stay open until 1am the following Sunday. Jaime Puebla / TheShow more

Dubai retailers face a soaring wage bill during the 24-hour Eid Al Ahda shopping festival as employment lawyers warn staff working overtime must be paid up to 50 per cent more per hour.

Hiring retail staff in the UAE is a long process, making it difficult for stores to take on temporary staff during Eid. In many cases employers must ask staff to work longer hours at higher rates, dramatically affecting wage bills.

"In accordance with the provisions of the UAE Labour Law, any hours worked in excess of the normal working hours should be paid at overtime rates, said Rebecca Ford, a partner at Clyde & Co law firm. "This means that retailers requesting their staff to work overtime during the Eid shopping period will be faced with a higher wage bill."

For three consecutive weekends over the Eid period, beginning on Thursday, stores are expected to open in malls from 10am on a Thursday and stay open until 1am the following Sunday. Such a long period of consecutive working hours is a first for the UAE.

Retailers have to manage the extra hours in one of three ways: asking staff to work longer hours; organise split shifts so that there is a skeleton staff in the middle of the night; or ask employees from stores in other emirates to work in Dubai during that period.

The labour law states that staff work a maximum of eight hours per day, or nine hours in the case of retail establishments, cafes and bars, and anything over this is considered overtime.

Any staff working overtime must be paid 25 per cent more than their normal hourly rate. If the overtime is worked in the hours form 9pm until 4am or on a Friday or public holiday, then staff must be paid 50 per cent more than their normal hourly rate.

For public holidays, staff are also entitled to a day off in lieu or the equivalent pay for that day.

"Employees in a senior managerial or supervisory function can, however, be asked to undertake overtime without additional pay," said Ms Ford.

"In the run-up to the [Eid] Dubai shopping festival, the owners of retail outlets in the main shopping malls and other centres will wish to remind themselves of the provisions in the Labour Law relating to overtime," said Alex McGeoch, the head of employment law at Hadef & Partners.

"No doubt retailers who observe good human resource practices will ensure that their staff are properly remunerated according to legal requirements. They will also know, from experience, that a well-treated workforce is also likely to be happy and motivated, resulting in more satisfied customers and of course bigger profits for the business."

It is unclear what the total extra cost of the 24-hour shopping period will be for retailers, but a store manager at one major retailer, who was speaking on condition of anonymity, said his company would ask staff to work 15 per cent longer during the period, which would mean overtime paid at 25 per cent to 50 per cent more.

Richard Adams, a director at Acuity Middle East, a retail and business consultancy, said although retailers, particularly luxury stores, would be hit with a greater wage bill over the Eid period, the middle of the night offered a huge opportunity to capture sales.

"One can certainly talk about the cost side and there will certainly be an uptick in costs," he said. "[But] GCC nationals like to shop late. We know from survey data that many seek out retail and [food and beverage] offerings after 10pm when malls are typically closed during the working week. As a result, the sales uptick from the 24-hour Eid in Dubai shopping festival should not be underestimated."

Vipen Sethi, the chief executive of Landmark Group, which operates Centrepoint, Babyshop and Splash among other brands, said he would move staff from stores around the country to cope with the 24-hour shopping period, rather than be hit with a huge wage bill.

"We will create shifts to work the 24 hours, but I think it's going to be quite taxing for staff," he said.