The DIFC is a separate legal jurisdiction in Dubai. It was established in 2004 and has its own civil and commercial laws which are based on common law principles and which seek to adhere to international standards. One of these laws is the employment law.
The original DIFC employment law was introduced in 2005 and was modelled on international standards while taking into account some local factors. By way of example, the original maternity leave provisions which allowed an employee up to 90 calendar days maternity leave (this has now been amended to 65 working days) are somewhat less generous than, for example, EU standards. However, as local maternity leave in the UAE is limited, the DIFC has, on this particular aspect, sought to strike a balance between the two standards.
Seven years on, and the DIFC has consulted with interested parties and sought to clarify and further develop some of the provisions of the original law. The amendments to the employment law came into force in December 2012.
DIFC employment law amendment law
Several of the changes provide some welcome clarity to the DIFC employment regime. For example, the law now requires that:
- an employer need only issue an employee with an employment contract, rather than the previous requirement for a statement of employment particulars which repeated the employment contract;
- employment claims should now, in the first instance, be lodged at the small claims tribunal of the DIFC court, in line with other types of dispute, rather than referred to the Director of Employment Standards, whose role has been removed; and
- employees are only entitled to UAE national holidays that fall on working days and the periods for maternity leave and sick leave have also been converted to working days.
Employees and employers have both benefitted under the amendments. For example, employers now only need to provide health insurance for their employees rather than cover for health and disability loss of income. They are also given 14 rather than 7 days to pay all wages owing to an employee following a termination of employment. The changes also allow employers to dismiss an employee who takes sick leave in excess of the 60 working day entitlement afforded by the law. Previously employees were protected where the extra leave was due to a medical condition that prevented them from working.
On the other hand, employees have benefitted from clearer discrimination provisions including protection against harassment and a more detailed definition of disability. The amendment law also clarifies that employees are entitled to 20 working days’ holiday per annum and introduces the ability to carry up to 20 days of untaken leave into the following calendar year. Employees have also been granted the right to compensation for injuries arising out of or in the course of their employment. Should the employee die there are also provisions for his/her named dependants to receive no less than 24 months wages in compensation.
The changes to the DIFC employment law are essentially a move towards greater clarity and legal certainty for employers and employees operating in the DIFC. They do not appear to overly favour one side of the employee/employer relationship. The amendments are significant enough, however, to warrant both parties’ attention.