Dubai International Financial Center (DIFC) has a newly-enacted employment law (No 2 of 2019) for companies operating within the special economic zone. The updated employment legislation doesn’t carry all proposed amendments drafted and announced in March of 2018; however, new provisions are introduced which provide more family-friendly benefits. Amendments to the law aim to balance and protect the interests of employers and employees alike. This article highlights the noteworthy changes made to the legislation.
For employers:
Settlement agreements
- Waiving of rights – employees may now choose to waive their statutory employment rights by entering into settlement agreements.
- Legal advisory for employees – A settlement agreement must establish that the concerned employee received independent legal advice and the parties involved took part in dispute resolution procedures prior to the settlement agreement.
Maternity and Paternity
- Paternity leave – a male employee may take a 5-day paternity leave provided that the new father has been continuously employed for at least one year. The employer must be notified eight weeks prior to the expected date of delivery for the pregnant wife. The leave can be taken within a month after the child’s birth.
- Nursing breaks – a mother returning from her maternity leave and is working for a minimum of six hours a day is entitled to a nursing break of one hour six months following childbirth.
- Maternity and paternity leave for adoptive parents – previously, an employee adopting a child can only apply for maternity/paternity leave if the child is under 3 months. The new employment legislation extended this right to cover adopted children under 5 years old.
- Paid time off for antenatal appointments – the new legislation for employment in DIFC allows a male employee to take a paid time off in order to accompany the wife to an antenatal appointment.
Non-discrimination
- Grounds of discrimination – non-discrimination provisions were expanded to include maternity, pregnancy, and age discrimination. The new employment legislation also provided clarity on what legally constitutes as discriminatory conduct.
- Compensation – courts may award an employee facing discrimination with a maximum compensation of the employee’s annual wage.
Gratuity payment
- Basic wage – in DIFC, the basic wage must at least be 50% of employee’s annual wage.
- Gratuity payment for employment termination – gratuity payment must be made even for termination for cause cases.
- Pension scheme – instead of gratuity payment, an employee may opt to receive contributions from the employer as part of a retirement savings scheme or pension scheme.
For employers:
- Sick pay – employees are now only paid one hundred percent of their daily wage for a maximum of 10 days of sick leave within a 12-month period.
- Garden leave – an employer has the right to insist that employees forgo work duties during the notice period.
- Time off to search for work while on notice – an employee is no longer entitled to take time off to search for another job during the notice period.
- Time limits for claims – 6 months from the employee’s date of termination and 6 months from date of discriminatory act (court has the discretion to extend).
Penalties for Breach on Employment Rights
DIFC’s new employment law specifies the fines and penalties on breach of employment rights; however, the court may choose to impose additional orders or penalties. DIFC Authority’s board of directors may also expand fines and penalties apart from appointing inspectors in investigating affairs of the breach.
Employers and employees in the international financial hub have to be aware of the changes that are brought about by the new legislation so as not to be liable to fines and penalties. In addition, HR departments and employers need to amend Pro-forma employment contracts, document retention procedures, and employee handbooks to reflect the recent changes.
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