Articles

New DIFC Employment Law No.2

20 June 2019

By: Salma Abdussalam

Overview

The Dubai International Financial Center (DIFC) is a well renowned international business hub which has its own independent legal and regulatory framework. In line with the DIFC’s aim to continuously develop its governance regime, a new Employment Law, Law No. 2 of 2019, has recently been enacted to take effect on Wednesday, 28th of August 2019 (90 calendar days after the enactment). The new law shall apply to:

any DIFC establishment
any individual employed by way of an employment contract by a DIFC establishment
any individual and company agreed upon the DIFC laws in their employment contract
any employee working or employed in the DIFC pursuant.
The new law repeals and replaces DIFC Employment Law No.5 of 2005 and considers its main objective to be providing the employees a minimum standard of employment, promoting their fair treatment by employers and adapting employment practices aimed at contributing to the prosperity of the DIFC establishment.

Some of the key issues addressed by the new legislation include:

Paternity Leave: Male employees who have been employed for over 12 months will be entitled to 5 working days paid paternity leave, considering, the employee has provided written notice to his employer 8 weeks before the expected week of childbirth or date of adoption (if the adopted child is less than 5 years old).
Sick Pay: During the annual working period, any sick leave taken by an employee within the year, which has been notified to the employee and if required, been supported by a medical certificate covering the absent days, will be paid full of his/her daily wage for the initial 10 working days. Any following sick leave taken for the next 20 working days will be paid half of his/her daily wage.
End-of-Service: Limits the penalties for late end-of-service settlement payments.
The new Employment Law also recognises seconded, part-time and short-term employees. All provisions set out in the new Law will be administered by the DIFC Authority (DIFCA), who may impose fines and penalties or both as well as set limits on compensation for violations of the Law. Claims in regard to the new Law must be brought upon the court within six (6) months of the relevant employee’s termination date.

As such, it can be said that the DIFC Employment Law No. 2 of 2019 seeks to balance the interests of the employees and the employers by reducing sick pay and sick leaves and introducing family-friendly paternity leave and indicates a move towards a more practical governance approach to employment.

For the full text of the law, click here.

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