United Arab Emirates: The New DIFC Employment Law 2019

Last Updated: 11 July 2019
Article by Anir Chatterji, Mark Schofield and Darren Harris

In brief

The revised version of the DIFC Employment Law, Law No.2 of 2019 (the "New DIFC Employment Law") is due to come into force on 28 August 2019 and will completely replace and overhaul the existing employment law regime in operation in the DIFC, Law No.4 of 2005, as amended (the "Old DIFC Employment Law").

This article provides an overview of the key changes made. Employers are well-advised to ensure their employment contracts, policies and handbooks are up-to-date and in alignment with the New DIFC Employment Law before the go-live date in August.

In detail

The Old DIFC Employment Law was subject to a public consultation in March 2018 and following extensive public comment to the draft changes proposed, the DIFC Authority has now published a final version of the New DIFC Employment Law, which shall come into force on 28 August 2019. A number of key changes have been introduced as part of the New DIFC Employment Law which employers operating in the DIFC will need to be mindful of, not least because a new penalty system of fines has been annexed as part of the New DIFC Employment Law for contraventions, non-compliance and/or breaches.

We have outlined below the key changes forming part of the new employment law framework.

Provision

New DIFC Employment Law

Application

Employers and employees can now contractually opt into the New DIFC Employment Law (previously its application was restricted only to employees of an establishment having a place of business in the DIFC and who were based within, or ordinarily working within or from, the DIFC).

The New DIFC Employment Law also specifically recognises (although has limited application to) part-time and short-term employees.

Limitation period

Employment claims must be brought before the DIFC Court within six months of the employee's termination date (save in discrimination cases where the limitation period commences upon the later of when the New DIFC Employment Law is effective (28 August 2019) and the date of the act or omission forming part of the discrimination claim).

Secondments

The concept of "secondments" has been expressly recognised under the New DIFC Employment Law with a specific secondment card being required to be procured and maintained by the parties from the DIFC Authority in order to legitimise and validate the secondment arrangements (specific provisions of the New DIFC Employment Law will not have application to seconded employees, however).

Late payments

The late penalty payment regime (which was a particularly contentious provision in the Old DIFC Employment Law) has been revised such that it will now only be triggered where the amount due and not paid to an employee (which expressly excludes any bonuses, grants and/or commission payments) is held by the DIFC Court to be in excess of an employee's weekly wage.

Importantly, the penalty will:

  • be capped at six months' daily wage
  • be waived by the DIFC Court in respect of any period during which a dispute is pending in the DIFC Court or where the employee's unreasonable conduct is the material cause of the employee failing to receive the amount due from the employer.

Discrimination

The anti-discrimination provisions have been expanded to include:

  • additional protected characteristics - being age, pregnancy and maternity
  • victimisation - that is, protection against a protected act. For example, where an employee makes an allegation of, or brings a claim for, discrimination.

Employers will be liable for any act of discrimination by an employee done in the course of their employment unless the employer is able to deduce evidence that it took such steps as were reasonably practicable to prevent the employee from carrying out that act.

Relevantly, the DIFC Court can now, in the event of a finding of discrimination and/or victimisation, award the following remedies:

  • compensation of up to one year's wage (being salary and allowances) which can include an award in respect of injury to feelings
  • a declaration
  • a recommendation for the employer to take certain steps to reduce the adverse effect on the successful employee
  • if the employer unreasonably fails to comply with any recommendation made by the DIFC Court, it has discretionary power to increase the amount of monetary compensation awarded to two years' wage.

Family friendly benefits

Increased or expanded family friendly benefits include:

  • male employees who will have been continuously employed for at least twelve months immediately preceding the expected or actual week of his wife giving birth will be entitled to five working days of paid paternity leave. The right to take paid time off to attend appointments for antenatal care is extended to expectant fathers
  • female employees returning to work from maternity leave will be entitled to specific nursing breaks
  • female employees who are adopting a child will be entitled to statutory maternity leave if the child is less than five years old at the time of adoption.

Sick Leave

Sick leave remains at 60 working days per year but only the first 10 days will be at full pay. The next 20 working days will be at half pay and the remaining 30 working days will be unpaid.

Termination of employment

The New DIFC Employment Law maintains the existing minimum notice periods but parties cannot agree to shorter (only longer) notice periods.

Employers will only be allowed to make a payment in lieu of notice if an employee agrees to the payment in a settlement agreement (which meets specific terms as outlined in the New DIFC Employment Law).

Employers will be entitled to place an Employee on garden leave for all or part of their notice period.

ESG/pensions

For ESG calculation purposes, basic salary will need to comprise at least 50% of the employee's total wage (which includes allowances but excludes bonuses, grants and commissions). The ESG will be payable to an employee even if the employee is dismissed for cause (gross misconduct).

Employees may choose to receive pension contributions into a non-UAE retirement fund (or substantially similar scheme) instead of receiving an ESG payment, provided the aggregate contributions made by an employer are not less than the ESG the employee would have been entitled to receive.

Settlement agreements

Under the New DIFC Employment Law, an employee may enter into a written agreement with the employer to terminate the employment or settle a dispute with such an agreement including a waiver of the employee's rights, remedies, obligations or claims, provided that specific conditions are met.

Miscellaneous

The New DIFC Employment Law also includes additional changes, including but not limited to:

  • the introduction of a stringent penalty system of fines (of either US$2,000 or $10,000 per infraction) in the event of breaches or non-compliance with the New DIFC Employment Law
  • the minimum age for an employee will increase from 15 to 16 years of age
  • the mandatory retention period for employee records will increase from two to six years; and employees will only be permitted to carry over five (rather than 20) days' accrued vacation to the following year.

The takeaway

The changes brought about by the New DIFC Employment Law are significant and comprehensive in nature and due to the penalty system of fines in place for breach, employers are well-advised to ensure their employment contractual documentation, policies and handbooks are in alignment with the New DIFC Employment Law before its go-live date of 28 August 2019.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Afridi & Angell Legal Consultants
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Afridi & Angell Legal Consultants
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions