On 30 May 2019, the Dubai International Financial Centre (DIFC) enacted a new employment law which introduces statutory paternity leave and amends several provisions of the existing 2005 employment law, including sick leave pay and paid time off. The 2019 new employment law will enter into force 90 days after enactment on 28 August 2019.
The 2019 new employment law is aiming to place the UAE on par with global best practices by providing regulations that balance the interests of both employers and employees in the DIFC.
Impact on employees
The 2019 new employment law introduces the following positive changes for employees:
Statutory paternity leave
New fathers will be entitled to five employer-paid working days within the first month of the child’s birth, so long as the employer is notified eight weeks prior to the due date. To enjoy this new benefit, the new father should have completed a minimum of 12 months of service. Male employees shall not receive compensation in lieu of taking accrued paternity leave.
Leave entitlements in the event of adoption
Female and male employees adopting a child under the age of 5 will be entitled to statutory leave entitlements. Previously, maternity leave was only available for female employees adopting a child under the age of 3 months.
Paid time off
Male employees will be entitled to employer-paid time off to attend their pregnant spouses’ ante-natal appointments. In addition, female and male employees who plan to adopt a child will also be entitled to an aggregate of eight hours of employer-paid time off to attend adoption proceedings.
Starting from 28 August 2019, employees that have been dismissed for cause will be entitled to a gratuity payment. In addition, for the calculation purposes of the gratuity, annual basic wages should not be less than 50% of the employee’s total annual earnings.
Protected characteristics for discrimination have been expanded to include pregnancy, maternity and age. In addition, the new law introduces compensation provisions following a discrimination claim that is capped at 12 months’ wages.
Impact on employers
The 2019 new employment law introduces the following positive changes for employers:
Sick leave pay
Currently, employees are entitled to 60 working days of sick leave per year, fully paid by the employer. Starting from 28 August 2019, the 60 days of sick leave will be paid as follows:
- First 10 days are 100% paid by the employer.
- Next 20 days are paid at 50 % by the employer.
- Last 30 remaining days taken in the same 12-month period are unpaid.
Employers will be able to include a probation period up to a maximum of six months in the employment contract.
Time off during notice period
Employees will no longer be entitled to take paid time off to look for another job during their notice period.
Employers’ obligation to retain employees’ records increased from 2 years to 6 years following termination.
DIFC employers should review and update their employment contracts and handbook as well as their internal policies and procedures to reflect the new changes by the deadline. Failure to comply may result in fines and possible unfair dismissal and discrimination claims.