Changes to the DIFC Employment Law in the UAE

As of June 2019, the Dubai International Finance Centre announced a new law to replace the existing employment law that has been in practice since 2005. The changes will directly affect approximately 24,000 employees of the DIFC and has been structured to provide a balance and synergy between the business interests of the employers and the rights of the employees at the DIFC.

The DIFC Law 2 includes changes made for a variety of employment conditions, including part time employment and probationary periods. Most provisions have been specifically created with the part-time employee in mind, with the exception of entitlements for leaves of absence. Additionally, maternity and paternity leave conditions have been expanded to reflect a wider variety of situations and provide more flexibility for new parents. Additionally, DIFC Law 2 has reduced the annual amount of an employee’s sick pay and sick leave.

All of these updates come with new minimum requirements for each job role. These essential job functions and requirements cannot be reduced or waived in any circumstance, but instead may be increased to reflect a higher standard if that is deemed appropriate by recruiting decision-makers. Any changes made to the employee contract or job requirements now also have to be processed in writing and must be signed by both the employee and employer. Furthermore, employees may also now be subject to probationary periods up to six months in length. If an employee is terminated during this probationary period, DIFC is not required to provide a minimum notice period until the probationary period is complete.

In order to prevent discrimination or victimization in the workplace, the DIFC has now created a number of protected acts for employees. For example, employers cannot victimize or discriminate against any employees taking part in a protected act. It is up to the employee to make the appropriate individuals aware of any victimization or discrimination affecting them within six months of the initial offense.

Additionally, the standards regarding terminating employees and the settlements provided have been altered with the new DIFC Law 2. This new legislation does not affect employees that have been terminated with just cause, as they will still receive notice pay. Furthermore, there are no provisions within this law for constructive termination or unfair dismissal. Legislation regarding these concepts may be created in the future. Relatedly, in situations where employees are hired and resign within six months of hire, employers may be able to recuperate any recruitment costs that were paid to acquire this employee.

Overall, these changes to the Law at DIFC have been created to ensure global compliance with employment standards beyond the scope of the DIFC. These new amendments are progressive, but not so radical that they will significantly change the operations of the DIFC. The changes to DIFC Law 2 is expected to result in increased organizational structure, along with more boundaries and regulations that are clearer for both the employees and employers of the organization.

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