UAE: Dubai amends some employment laws legislation

Abdallah Shahin - | UAE

The release of new revisions to certain legislation pertaining to the Employment Law, the Trust Funds Law, the Corporations Law, and the Employment Law was announced by the Dubai International Financial Centre subsequent to a period of public consultation in 2023. On March 8, the adjustments were implemented, and the modifications to the operational regulations would be enforced starting from December 27, 2023.

According to Jack Visser, the Chief Legal Officer at the DIFC, the legal and regulatory framework of the Centre is founded upon international standards and concepts derived from common law.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai (may God protect him), has implemented new legislative amendments to ensure that the laws of the center remain up-to-date with and incorporate the most effective international methods, while also addressing the specific requirements of the region. The DIFC places utmost importance on its dedication to establishing an optimal structure for the growth and advancement of financial services, innovative technology, and other industries by means of well-defined and transparent legislation.

The DIFC has revised Part 10 of the current Employment Law to mandate that DIFC employers provide "additional" payments to an employment qualification plan, such as the DIFC Workplace Employee Savings Scheme, to their GCC national employees. These payments are necessary in cases where the value of their contributions to the General Pensions and Social Security Authority is lower than what they would have received from monthly contributions to the end-of-service gratuity under the Employment Law if they were not citizens of cooperation countries.

Indeed, this modification results in equitable chances for individuals residing in the cooperating nations in the core, who would otherwise have received reduced contributions through their monthly installments to the General Authority for Pensions and Social Security system. Nevertheless, it is imperative that the monthly "extra" payment obligations do not surpass AED 1,000.

Additional revisions to the Employment Law pertain to scenarios where an employment rehabilitation plan is forbidden from taking contributions from the employer or the employee due to specified penalties.

As a result of these amendments, if the employer or employee faces penalties that prevent the job rehabilitation plan or its service providers from receiving end-of-service gratuity contributions on behalf of the employee, the employer is no longer required to provide this contribution on a monthly basis to the job rehabilitation plan. Instead, the employer is now obligated to collect these contributions on behalf of the employee(s) until the sanctions-related ban is lifted or when the employment relationship ends, whichever occurs first.

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Abdallah Shahin
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