New DIFC Employment Law – The Changes – Part 1

08 Jul 2019

New DIFC Employment Law – The Changes – Part 1

The new version of the DIFC Employment Law - Law No.2 of 2019 (the "New DIFC Employment Law") - will come into force on 28 August 2019 and will entirely substitute the existing employment law regime in operation in the DIFC - Law No.4 of 2005, as amended (the "Old DIFC Employment Law").

Employers are instructed to have their employment contracts, policies and handbooks up-to-date and in compliance with the New DIFC Employment Law before the go-live date in August 28, 2019.

Summary of the key changes forming part of the new employment law framework:

1. Application – All employers and employees can now contractually opt into the New DIFC Employment Law;

2. The new law recognises part-time and short-term employees;

3. Limitation period – save in discrimination cases, employment claims must be brought before the DIFC Court within six months of the employee's termination date;

4. Secondments - The notion of "secondments" has been expressly recognised under the New DIFC Employment Law with a specific secondment card being required to be procured and maintained by the parties from the DIFC Authority in order to legitimise and validate the secondment arrangements;

5. Late payments - The late penalty payment regime will now only be activated where the amount due and not paid to an employee (which expressly excludes any bonuses, grants and/or commission payments) is thought by the DIFC Court to be in excess of an employee's weekly wage;

The penalty will:

• have the maximum limit amount of six months' daily wage;

• be waived by the DIFC Court in respect of any period during which a dispute is pending in the DIFC Court or where the employee's unreasonable conduct is the material cause of the employee failing to receive the amount due from the employer.

Since the above is only an overview, should you require specific advice concerning the New DIFC Employment Law, please contact Helena Lousada at helena@jamesberrylaw.ae.

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