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DIFC’s New Employment Law Comes Into Effect

3/9/2019

DIFC has announced that DIFC Law No. 2 of 2019 (“New Law”) governing the employment relations within the DIFC will come into effect from August 28, 2019.

DIFC has announced that DIFC Law No. 2 of 2019 (“New Law”) governing the employment relations within the DIFC will come into effect from August 28, 2019. The New Law will replace the DIFC Employment Law No. 4 of 2005 as amended by DIFC Law No. 3 of 2012. The New Law addresses and clarifies several key aspects concerning the terms of employment. Some of the significant changes are as follows:

1. End of service benefits

The New Law states that gratuity will now be paid even if the employment has been terminated for a cause. It further states for the calculation of this benefit, the basic wage shall not be less than 50% of the annual wage.

2. Pay towards sick leaves

The New Law provides reduction in payment of wages towards sick leaves. Previously, the pay was 100% for the first 60 days of absence in a single year. Employees will now receive 100% pay only for the first 10 days, 50% for the next 20 days and thereafter, no sick pay for the next 30 days.

3. Paternity and maternity leaves

The provision for paternity leave has been introduced. Fathers can now take 5 days of paid leave provided that he was continuously employed for at least 12 months. With regard to the maternity leave, the new law states that mothers returning to work from maternity leave working for more than 6 hours per day are entitled to nursing breaks of up to one hour for the first 6 months.

4. Anti-discrimination provisions

The coverage of discriminatory behavior has been extended to cover discrimination based on age, pregnancy and maternity. The New Law seeks to protect the employees and has introduced remedies for such circumstances.

5. Notice period

Notice period cannot be shorter than the minimum statutory threshold. However, employer and employee can agree for a longer notice period. Further, salary in-lieu of notice can be paid in the event there is a written agreement between the employer and employee.

6. Penal provisions

The New Law prescribes penalties for non-compliance with basic conditions of employment, visa and residency sponsorship. Such penalties range between USD 2,000 to USD 10,000.

The New Law has recognized the transition in employment and has introduced changes largely in favor of employees. Companies now have to amend their existing employee handbooks/contracts to align the same with recent changes. If you need any help with amending / modifying the employee handbook / employment contracts, please feel free to contact us at contact@motei.com to arrange for a consultation meeting with one of our lawyers.

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