UAE workers have been left reeling as companies slash costs to survive the damaging financial impact of the coronavirus pandemic.
Having to absorb pay cuts, unpaid leave and, in some cases, job losses has become a stark reality as lockdowns continue to be imposed around the world.
The National spoke to employers and employees who have been directly affected by the downturn in the global economy.
While most said they were able to cope for now by living off their savings, they were fearful the long-term picture could be far bleaker if the virus was not brought under control soon.
“I’ve had to close my company and it’s still completely up in the air when we can reopen,” said South African Tamarin Mather, 39, who runs a company that offers swimming and scuba diving lessons.
“I was able to pay my staff a full month’s wage before we closed and in the short term we can make it work.
“If it goes on much longer I might have to close the company and leave the country as we won’t be able to afford school fees.”
The pandemic, which originated in the Wuhan region of China, has had a severe impact on the world’s economy with sectors like leisure and tourism especially feeling the brunt.
Ms Mather, who is currently expecting her third child, employs five people at the company she runs with her sister in Dubai.
“So far we’ve been taking it day to day but I don’t how much longer we can stay in Dubai if it continues,” she said.
Asking staff to take unpaid leave is another tactic companies have employed as they wait for business to pick up again.
One employee in the food and beverage sector told The National she faced a 45 per cent pay cut.
A number of her colleagues were also asked to take unpaid leave or accept a 20 per cent cut.
A 38-year-old British man, asking to remain anonymous, who works for a sports company said he received an email informing him that staff were going to be placed on unpaid leave, without being consulted.
“I was called into the office and given two options. Either to resign or sign a document saying I was taking unpaid leave without a housing allowance,” he said.
“I took the unpaid leave so I would still have a visa along with my son and nanny.”
He said his wife, who is 13 weeks pregnant with their second child, is still bringing in a salary as she works as a teacher.
“I don’t know how long we can keep it up for though,” he said.
The government recently announced measures that employers could take to help mitigate the loss of business.
Under the new rules, employers are allowed to ask staff to work from home or take paid leave.
However, they are not allowed to reduce salaries or force staff to take unpaid leave without employees’ agreement.
When the 38-year old British man informed his employer of the new procedures he was told “I am afraid it is time to lay staff off”.
Jobseekers have also been adversely impacted by the coronavirus lockdown, with firms deciding to put a freeze on hiring.
“It’s been challenging because most recruiters are telling me positions are now on hold,” said Dubai resident Shanaz Miah, from the UK, who is looking for work in the HR sector.
She has been keeping herself busy by taking online courses to improve her skillset in the meantime.
“I’ve tried to stay positive so it doesn’t impact on my mental health,” she said.
“Everytime you look at the news it just seems all so negative.
Keren Bobker, a columnist for The National and senior partner at global financial services company Holborn Assets, said temporary pay cuts, while not ideal, were much more preferable to the alternative.
“For many it will be a case of accepting a reduction or facing redundancy as companies cannot afford to keep them on at the full salary,” she said.
“Many people are going to face some real financial pressures, especially as they were living from pay cheque to pay cheque with nothing set aside for a rainy day.”
She said banks need to follow the instructions of the UAE Central Bank and be more amenable when considering deferments on loan repayments for those affected by coronavirus.
Barney Almazar, director at Gulf Law, advised against employees resigning if they cannot reach an agreement with employers over pay reductions.
“If the employee does not agree with the salary reduction, the company can terminate their employment,” he said.
“But they should not resign as they did not do anything wrong. Under the law, the company still has the obligation to pay gratuity.”
