DIFC Employment Law no. 2 of 2019 (“New Law”) has recently been enacted which repeals and replaces the DIFC Law no. 4/2005 as amended by DIFC Law no. 3 of 2012 (“Previous Law”).

There has been an ongoing debate about the implemented changes

introduced by the New Law. Some changes have been enacted to protect the

employers, such as the limitation of liability period of 6 months and

the provisions which allow employees to waive their rights under the New

Law subject to agreements put in writing. Other changes have been

enacted to protect the employees, such as provisions for

non-discrimination and non-victimization, the penalties imposed by the

DIFC for employer’s non-compliance, and forbidding the employer to

retain the employee’s original passport (although the latter was always

the legal position in the UAE).

Application of the Law:

Limitation Period: Art. 10 of the New Law stipulates that the courts will not consider a claim unless it is brought within 6 months of the relevant employee’s termination date.

Hiring Children: The minimum age has increased from 15 to 16 under the New Law.

No Waiver: Art. 11 allows the employee to waive their rights and remedies under the new law by entering into a written agreement with the employer (to terminate or resolve a dispute) provided that the employee either agrees in writing to confirm that they were given an opportunity to receive independent legal advice from a lawyer or that the employer and employee took part in mediation proceedings provided by the court prior to entering into the written agreement.

Payroll Records: Art. 16 now provides that records relating to the employee must be kept for at least 6 years after an employee’s termination date, as opposed to 2 years as per the Previous Law.

Part-Time Employees: Art. 17 provides certain provisions relating to part-time employees and the method of calculation of the part-time employee’s working days.

Recruitment Costs: Art. 21(3) provides that if an employee terminates their employment contract for any reason other than termination for cause as per Art. 63 within the first 6 months of their employment, the employer may recoup reasonable costs and expenses which were directly incurred by the employer, expenses supported by proof of expenditure and those specified in the employment contract as being payable by the employee. Such a provision did not exist under the Previous Law.

Vacation Leave : Under Art. 27, employees are entitled to carry forward up to 5 working days of accrued leave into the next year for a maximum period of 12 months. Under the Previous Law, employees could carry forward 20 working days.

Sick Pay: As per Art. 35, employees shall only receive 100% of their daily wage for the first 10 working days of their sick leave and 50% of their daily wage for the next 20 working days – taken within 12 months. No additional sick leave is payable after 20 working days. Under the Previous Law, employees were allowed 60 working days of full pay.

Paternity Leave and Pay: Art. 39 now provides for 5 working days paternity leave as long as the male employee notifies his employer that his wife is pregnant at least 8 weeks before the expected week.

Time off for Ante-Natal Ccare and Adoptions Proceedings: Art. 41 provides certain provisions and rules for time off for employees with ante-natal care and appointments.

Liability of Employers for Employees’ Conduct:

Visas and Permits: Art. 57 of the New Law provides the employer’s responsibility to obtain and maintain the sponsorship and visa documents without being able to reclaim any of the costs. Furthermore, this provision stipulates that the employer is not allowed to retain the employees’ passport or other original documents of the employee.

Discrimination and Victimization:

Termination:

Penalties and General Contraventions: Art. 67- 70 of the New Law now provides for fines and penalties against the Employer for breaching their obligations. The DIFC Board of Directors are entrusted with further powers to administer additional fines and penalties. The DIFC Board of Directors may also appoint an inspector to investigate the affairs of the employers to confirm compliance.