13 Jun 2019

New DIFC Employment Law introduced

Authored by: Rachel Hill and Aisha Khokhar

The long-awaited new Dubai International Financial Centre (DIFC) Employment Law has now been enacted and was issued on Wednesday 12 June 2019. 

The new law, entitled DIFC Employment Law No. 2 of 2019 (the “New Law”), replaces the previous DIFC Employment Law No. 4 of 2005 (as amended) and will come into effect on 28 August 2019.   

From an employee perspective, provisions of the New Law include the introduction of paternity leave and remedies for discrimination (the previous law contained no statutory regime for compensation in respect of discrimination claims). For employers, provisions include a reduction in the amount of statutory sick pay payable by an employer to an employee and a limitation on the application of penalties on employers for not paying termination payments to employees on time. The New Law also recognises seconded, part-time and short-term employees and sets out specific provisions in relation to them.

One of the objectives of introducing the New Law has been to balance the needs of employers and employees in the DIFC whilst, at the same time, maintaining a strong framework of international employment standards which contribute to the DIFC’s success and reputation as a well-renowned and international business hub. 

With regard to the introduction of the New Law, his Excellency Essa Kazim, Governor of the DIFC, has said: "The DIFC Employment Law enhancements are integral to creating an attractive environment for the almost 24,000-strong workforce based in the DIFC to thrive, while protecting and balancing the interests of both employers and employees."

Hadef & Partners will shortly publish a detailed article on the New Law including our comments on how the New Law will impact our clients. Amendments to existing employment contracts, employee handbooks and policies will inevitably now be required. Please let our employment practice know if you require our input in this regard.