Most HR departments will concede that one of the most stressful and complex challenges they face is handling redundancies amongst employees. Apart from the emotional stress this can cause for all parties involved, there are logistical and legal implications to take into account. On top of all of this is the need to ensure that the employee is adequately supported during the leaving process – for their sake and the organisation’s reputation.
What is redundancy, and how is it managed in UAE Labour law?
Redundancy refers to an employee’s dismissal because of a reduction in the business requirement for that employee’s services.
According to the UAE Labour Law, redundancy regulations are covered under Ministerial Resolution 279 of 2020. Employers must provide their employees with sufficient notice (usually 30 days), notice pay (if the employee has completed probation), and the right to end of service payment (assuming one year of service).
Employees also have the right to compensation for accrued and untaken annual leave, repatriation flights, and any other elements stipulated in the contract. The actual employee rights in each case are dependent on the fixed rules specified in their employment contract.
Under the Resolution, employers must consider putting an employee on unpaid leave, on which both parties must agree. If an employee is made redundant, employers must continue to provide benefits (except salary), including housing, transport, and medical insurance, until the employee leaves the UAE or is employed elsewhere.
This article provides you with five tips you can follow to help you manage the process effectively.
1. Identify the Criteria for Selecting Employees for Redundancy
It is vital that you put time into selecting which groups of employees are to be made redundant. There are several ways of grouping people depending on the reason for the redundancy, such as:
- Employees in similar roles;
- Employees in specific departments or sections;
- Employees based in a particular location;
- Employees whose work has stopped or been reduced (or is likely to stop soon).
Some of the options listed are easier than others. If an entire department or physical location is closing, then everyone involved is impacted. However, if there are people in different departments or teams doing similar roles, it can be challenging to identify who should be selected.
2. Determine Whether you can Offer Voluntary Redundancy
It may make the process easier to offer voluntary redundancy rather than make the selection centrally. This approach will depend on circumstances but can enable employees to feel more of a sense of control and fairness in uncertain times.
Often voluntary redundancies will be enough to manage the company’s issues. However, sometimes it will be necessary to make selections if the uptake has been too high or too low. Employees who volunteer for redundancy are considered to have been made legally redundant and have the same rights as anyone facing compulsory redundancy.
3. Make sure you Meet Affected Employees Face to Face
Meeting employees to explain the redundancy, outline the process to be followed, and discuss individual employee concerns is a critical element of handling redundancies effectively – but it is arguably the most difficult due to the emotions involved.
This process has become more challenging during the pandemic as meeting face to face has been severely constricted, but even if the meeting can only be done online, it should not be missed out in the process.
For these meetings to be successful, the HR representative must be well prepared with facts and be ready to handle employees with empathy and care when they may be angry, hurt, and upset. Several meetings will likely take place during the process as the employee gets closer to leaving. Frequent meetings are likely in organisations with a large expatriate workforce, where issues such as end-of-service benefit, visa cancellation, repatriation and impact on family sponsorship are additional steps to consider.
4. Support Employees in Looking for Alternative Internal or External Roles
If there is any possibility of reallocating the employee to another position within the organisation, this should be explored. Issues can be faced in finding roles with similar grades and benefits packages. Still, most organisations widen the search to a grade below if feasible to give the best opportunity possible.
In an expatriate labour market, benefits packages can be a deal-breaker in transferring internally, as elements such as education allowances can make reduced packages unworkable.
It is essential that organisations also seek ways to support employees to find work in the broader external marketplace. Support may include various activities such as structuring CVs, providing training allowances for a period of skills development, providing paid time off for job search and interviewing, posting CVs on job boards and using contacts in other organisations, for example.
5. Easing the Final Days
No matter how well the process has been planned and executed, the final few days of leaving for any employee are fraught with emotions. They are losing tangible benefits such as their income, but they also lose their colleagues and the sense of belonging to an organisation. These feelings can be exacerbated when there has been a long service duration.
It is essential to show empathy and support the employee in whatever way they feel most comfortable. Some want a get together with colleagues, while others prefer to leave quietly with little public acknowledgement.
As an organisation, the more support you can give at this stage, the better the chance that the employee leaves with a positive experience and can adjust at their own pace to the new reality of being unemployed if this is the case.
It is also crucial to not forget the employees who will remain with the organisation as they may fear that they could be the next to be asked to leave or feel a sense of loss, both of which will reduce motivation and engagement.
Redundancy creates a challenging time for HR and employees, so anything you can do to make the process fair, empathetic, and respectful will make a significant difference to all concerned.
Taking time to plan and carry out the steps correctly will show respect to your employees and protect your reputation as an employer.
Contact us at HRBluSky today to explore how we can support you in managing your workforce.