Dubai’s DIFC enacts new employment law, introduces paternity leave

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

A new employment law has been enacted for the the Dubai International Financial Centre (DIFC) by Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai and Vice President and Prime Minister of the UAE.

The newly-enacted law addresses issues such as paternity leave, sick pay and end-of-service settlements.

Employer-focused provisions include expansion of employee duties, reduction of the statutory sick pay, limiting the application of mandatory late penalty payments for end-of-service settlements and recognising settlement agreements between employers and employees.

Provisions focussed on employees include the introduction of five days of paternity leave and penalties for discrimination. Penalties have also been introduced to ensure adherence to basic conditions of employment, visa and residency sponsorship, a statement said.

The law, which will come into effect on August 28, also applies to seconded, part-time and short-term employees.

It was subject to “substantial research and global benchmarking, as well as thorough public consultation,” the statement said.

The new regulation contains significant changes to both the existing DIFC employment law and the draft law which was issued by the DIFC Authority as part of its initial consultation in March 2018, said law firm Clyde & Co – which advised the authority on the new law.

“The key changes include the introduction of a six month limitation period for bringing employment claims, greater protection for employees against discrimination (including harassment) and victimisation, enhanced family-friendly benefits and increased clarity for employers and employees in relation to the payment of salaries and other entitlements,” the firm said in a statement.

Essa Kazim, governor of DIFC, said: “The DIFC employment law enhancements are integral to creating an attractive environment for the almost 24,000-strong workforce based in the DIFC to thrive, while protecting and balancing the interests of both employers and employees.”

DIFC had 2,137 active registered companies as of 2018, including 625 financial firms. The size of its workforce stood at 23,604 professionals as at year-end 2018.

Read: Dubai’s DIFC sees over 1, 220 new jobs, 430 new company registrations in 2018

Earlier this week, the DIFC also enacted a new insolvency law, aimed at attracting more investors.

Read: New insolvency law enacted by Dubai’s DIFC, lawyers say move will boost confidence