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New DIFC Employment Law 2019
The DIFC enacted on 30 May a new DIFC Employment Law, Law No. 2 of 2019.
The newly-enacted law addresses key issues such as paternity leave, sick pay and end-of-service settlements.
The New DIFC Employment Law – Salient changes
End of Service Benefits
The New DIFC Employment Law allows employees to choose between
- an end of service gratuity payment, or
- a pension contribution, provided that the total contributions are not less than what the employee would be entitled to by way of end of service gratuity.
The end of service benefits calculations remain the same.
This law stipulates that the basic wage of the employee, regardless of the designation, must not be less than 50% of the employee’s annual wage.
End of service payments must now be made, even in cases where an employee is dismissed for cause.
The notice period can only be extended (upon mutual consent), whereas earlier, notice periods could also be reduced or waived by mutual consent of the employer and the employee. The minimum notice periods will not apply to:
i) employees who are in their probation period; ii) employees who have a fixed term contract with a fixed end date; or iii) where an employee has been terminated for excessive sick leave.
An employer can make a payment in lieu of the notice period, through a settlement agreement and with the consent of the employee.
Sick Pay & Accrued Holiday
Employees sick leaves have been changed – from full pay for 60 working days, to
- full pay for the first 10 working days;
- half pay for the following 20 working days; and
- the remaining 30 days without pay.
Employees will no longer be allowed to carry over 20 working days holiday into the next working year – the new law introduces a cap of 5 working days.
Fathers can now take up to five working days of paid paternity leave, and also have the right to take time off to attend antenatal appointments, where they have been continuously employed for one year immediately preceding the expected or actual week of his wife giving birth, and where the employer is notified at least 8 weeks in advance. The New Law also extends to the adoption of a child.