Employers urged to act as Gulf conflict creates complex workforce risks

By David Carr, employment lawyer at Kingston-based Carter Bells

With the US–Iran conflict continuing to disrupt the Gulf region, employers are having to manage not just immediate disruption but prolonged uncertainty - bringing workforce, legal and operational risks into sharper focus.

While the hostilities continue - closing airspace, creating travel uncertainty and regional instability - employers should take a proactive approach to managing their workforce, where staff are based in, travelling to, or connected with the region.

Inaction or lack of a clear employment strategy could expose businesses to financial, legal and reputational consequences.

Employee safety and wellbeing should be a priority. The psychological impact of working through a conflict - including anxiety, disrupted sleep and uncertainty - is a foreseeable risk. Employers should maintain clear communication and provide support, especially for expatriate staff who may be more exposed and have fewer local support networks.

Practical issues are creating challenges. Employees may find themselves stranded or unable to return home, whether travelling for work or personal reasons. In some cases, they may remain entitled to pay, particularly if they are able to work remotely. Where remote working is not possible, employers may need to consider extending annual leave or agreeing alternative arrangements.

But allowing employees to work from a different country is not without risk. Immigration permissions, tax residency and local employment rights can all be triggered at short notice. In some cases, an employee working remotely overseas could even create a taxable presence for the employer in that jurisdiction.

The question of relocation is also sensitive. While employers are not usually obliged to fund emergency returns from overseas, they do owe a duty of care and should respond reasonably to concerns, particularly where employees feel at risk.

Payroll obligations continue regardless of the situation. In many Gulf countries, strict wage protection systems require salaries to be paid in a prescribed way and on time. Employers must ensure these arrangements continue uninterrupted, despite any operational challenges.

Where local labour is employed, businesses should be aware of the potential for military reservist call-ups in some jurisdictions, which may give rise to obligations such as preserving roles or continuing pay for those employees, depending on local laws.

Even in a crisis, existing employment law obligations remain in force, whether for local or expat workers. Any decisions around restructuring or reducing headcount must follow proper redundancy processes. Similarly, making significant changes to an employee’s role, location or pay without agreement could expose employers to constructive dismissal claims.

Beyond employed staff, businesses should also review their position in relation to contractors, agency workers and other third-party personnel, particularly where individuals are unable to work or return to their usual location.

Cybersecurity is another growing concern. Periods of geopolitical instability are often accompanied by an increased risk of cyberattacks, particularly where employees are working remotely using unsecured networks or personal devices.

A balanced and consistent approach - combining clear communication, practical support and careful risk management - is likely to be key as the situation evolves.

While the conflict shows little sign of resolution, employers who tackle issues and act decisively will be better placed to protect both their workforce and their business.