Proposed Amendments to the DIFC Employment Law

The DIFC Employment Law came into force on 14 January 2020 amending the DIFC Law No. 2 of 2019. The principal purpose of the amendment was to replace the concept of end of service gratuity with the DIFC Employee Workplace Savings Plan (DEWS) or an alternative qualifying scheme. The introduction of DEWS aligned the framework with international best practice.

Now, one year on, the DIFC intends to further amend the existing law to provide clarification and to address any other areas of uncertainty. The proposed legislative changes seek to clarify defined terms, rectify probationary periods under short, fixed-term contracts as well as the accrual of annual leave. Importantly, the amendments will render any agreement or arrangement that seeks to reclassify recurring payments to employees as non-recurring payments to be null and void and unenforceable. This prevents employers reducing an employee’s basic wage calculation for the purposes of the core benefit contributions by an employer under DEWS.

The DIFC Authority has published the proposed legislative changes for a 30-day public consultation period, ending on 28 March 2021. The consultation paper is available here.

Davidson & Co is a Law Firm in Dubai with over 50 years’ experience in the UAE; please contact Joanna Stewart in our Dispute Resolution team at jstewart@davidsoncolaw.com for further information.