DIFC enacts new employment law that introduces paternity leave

Revised provisions coming into effect on August 28 include introduction of five days paternity leave and reduction of sick pay

DIFC District. Courtesy Dubai International Financial Centre Authority
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Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, passed a new employment law following the enactment yesterday of an insolvency law for companies operating in the Dubai International Financial Centre.

Provisions targeting employees include the introduction of five days of paternity leave and penalties for discrimination to ensure adherence to basic conditions of employment, visa and residency sponsorship. For employers, provisions include expansion of employee duties and a reduction of the statutory sick pay. The law also limits the application of late fines for not paying end-of-service settlements on time.

“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,” said Essa Kazim, governor of DIFC.

The DIFC Employment Law - No 2 of 2019 - will come into effect on August 28, the Dubai government's media office said in a press statement Wednesday. The statement added that the Insolvency Law - No 1 of 2019 - will come into effect Thursday.

In April the DIFC said it would be replacing expatriate workers' end-of-service gratuity with a funded, trust-based savings scheme starting on January 1, 2020. The new plan offers employees a choice of up to 12 passive investment funds.

The application of the law has been clarified to include seconded, part-time and short-term employees. Settlement agreements between employers and employees will be recognised under the new law.

The insolvency law will facilitate bankruptcy restructuring and will provide an administration process where there is evidence of mismanagement or misconduct.