DIFC Employment Law No. 2 of 2019, enacted by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, has taken effect.

The new legislation addresses key issues such as paternity leave, sick pay and end-of-service gratuity.

Employer-focused amendments include the expansion of employee duties, anti-discrimination provisions, limiting the application of mandatory late penalty payments for end-of-service settlements, and also covers settlement agreements between employers and employees.

Employee-focused provisions include 5 paid days of paternity leave for male employees who have been contracted for at least twelve months prior to the expected or actual week of the birth. There has also been a reduction of the statutory sick pay; 60 working days per year with only the first 10 days at full pay. The next 20 working days will be at half- pay, and the remaining 30 working days will be unpaid.

Penalties have also been introduced to ensure adherence to basic conditions of employment, visa and residency sponsorship.

Other important points to note include:

• The new law recognises part-time and short-term employees;
• Employment claims must be brought before the DIFC Court within six months of the employee’s termination date (does not apply to discrimination cases);
• Secondment arrangements have been explicitly recognised with a “secondment card” being required and maintained by the parties from the DIFC Authority in order to be valid;
• The late penalty payment regime will now only be activated where the amount due and not paid to an employee (not including bonuses, grants or commission payments) is thought by the DIFC Court to be in excess of an employee’s weekly wage. The penalty will have a maximum limit of six months’ daily wage, and can be waived by the DIFC Court if a dispute is pending, or if an employee’s unreasonable conduct is the material cause of the employee failing to receive the amount due from the employer.

All employers and employees can now contractually opt into the new DIFC Employment Law No. 2 of 2019. Please contact us if you want to learn more.