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Basic Understanding with Respect to Employment Laws Governing in Dubai International Financial Sector

Basic Understanding with Respect to Employment Laws Governing in Dubai International Financial Sector

Basic Understanding with Respect to Employment Laws Governing in Dubai International Financial Sector
2 years ago


Dubai International Financial Sector (DIFC) in relation to the Employment Law

Dubai International Financial Sector (Hereinafter referred to as DIFC) is one of the many free zones in the United Arab Emirates (hereinafter referred to as UAE). Abu Dhabi and Dubai are two of the most important emirates situated in UAE. As the name suggests, Free Zones economically refers to where the rules and regulations governing in the seven emirates of UAE are different. Each of the seven emirates creates their free zones and DIFC is one of the free zones based in Dubai. In many respects, foreign countries territorially work and are located in the free zones of the UAE. DIFC is the most advanced free zone in UAE equipped with technologies suitable for the 21st Century, governed by its own laws such as the Contracts, Insolvency, Arbitration Panel, own legal rules of interpretation and real estate laws. These are included but not limited. The most important aspects of the DIFC laws are, they are based on Common Law Principle (which is based on principles rendered by judgements by Honourable Courts). UAE is governed by the Federal Labour Laws, but within the DIFC, DIFC Law No. 3 of 2012, The Employment Law is in place. Reliance should be placed on “Employment Law Amendment Law, DIFC Law No. 4 of 2020.” This article will explain about the Employment Law as referred to Labour Laws in DIFC. The article will further deal with various provisions, regulations and requisites between an employer and employee.


Employment Law Amendment Law, DIFC Law No. 4 of 2020 (Hereinafter referred to as Act)

What is the object for the enactment of the law?

There are majorly three objects for the law in force:

  • Providing the least minimum standards for Employees,
  • Promoting a fair treatment and building a good rapport between Employer and Employee,
  • Foster the growth of the trade businesses, which in return foster the growth of DIFC, UAE.

To whom is the law applicable?

Under Article 4 of the Act,

  • An employer whose place of business is in the DIFC,
  • An employee who works for an Employee by way of an Employment Contract
    • Based in or works from DIFC, or,
    • Agreed in the Employment contract
  • Alternatively, any individual working or employed in DIFC.

An Employment contract is in a written form between Employer and Employee that shall include;

  • Names of both the Employer and Employee
  • Nature of Work
  • Commencement of the work (date particularly)
  • Details of remuneration
  • Details of the working hours and working days
  • Nature of Employment
  • Number of Leaves (Paid or Unpaid, Sick Leaves, Vacation Leaves and Public Holidays)
  • Notice Period for termination
  • Summary of the work prescribing all the rules and regulations

What an Employer shall follow while hiring any person as an Employee for business purposes in DIFC

An Employer is required to follow a set of guidelines and adhere to that strictly while hiring any person as an employee for his business (es).

  • Shall not induce, influence, or persuade any person to work by misrepresenting regarding the nature, remuneration, conditions, or availability of the work (Under Article 12 of the Act).
  • Shall not employ a child below the age of sixteen (16) years, if does so, shall be liable for fine up to 10,000 USD. (Under Article 13 of the Act).
  • Shall provide the employee with a written Employment Contract with requisite details mentioned above within seven days of the commencement of work. (Under Article 14 of the Act).
  • Shall not request, or charge any amount of money from a person seeking employment. Besides that, also not charge any amount an employer incurs while recruiting a person. (Under Article 21 of the Act).
  • Shall provide and concern about the health, safety and friendly environment at workplace, which is free of discrimination and victimisation (Under Article 43 of the Act).
  • Shall ensure health and safety which includes but not limited to, minimum risks to health, providing information, instructions, training, informing about any risks while engagement in work (Under Article 44 of the Act).
  • The workplace shall properly be ventilated, adequate room temperature is set with proper lightning, Cleanliness and workplace size shall be ensured with proper drinking and sanitary conveniences. (Under Articles 45 – 52 of the Act). 
  • An employer is required to furnish all health insurance – related documents in accordance with the Federal Law or the Dubai Law. (Under Article 56 of the Act).

The above four points mentioned are liable for fine up to 2,000 USD by an employer if not in accordance with the provision mentioned. 

Duties of an Employee (Under Article 58 of the Act)

An Employee shall render his/her services faithfully and comply with all the lawful and reasonable instructions. An employee is not allowed for disclosing any confidential information of the nature of the business (es) worked for. No personal data or trade secrets shall be revealed in the public domain.   

Working Hours and Leaves provided for an Employee

Working Hours under Articles 22 and 23

An employee is supposed to work for A period of not more than 48 Hours in 7 day period, unless the employees prior consent is obtained. Moreover, in the holy month of Ramadan, the working hours ordinarily for a Muslim employee shall not exceed more than 42 hours in 7 day period. Observing this, the employer cannot deduct the employee’s salary.

Vacation Leave under Article 27 – 29

Any employee who has worked for a period of not less than 90 days is entitled to a period of 20 Paid Leaves in a calendar year. In addition to that, any employee whose vacations leaves are pending can carry forward it to the next year up to 5 leave. Public Holidays are exclusive of Vacation Leave.

An employee wishing to take any vacation leave shall inform the employer 7 days prior by providing a written notice specifying all the details about the leave.

Special Leave under Article 33

This provision is specifically related with the Muslim employees who had worked with the employer for more than a period of one year are entitled to 21 – day unpaid special leave by the employer during the course of the employment for performing Hajj pilgrimage.

Sick Leave and sick pay under Article 34 – 36

An employee is benefitted with a period of 60 leave consecutively or at irregular periods in a year. Although, every 3 days, the employer shall be informed by the employee or the first person to contact on behalf of the employee. In order of the leave taken, the employer shall pay 100% of the daily wage of the employee for first 10 days, 50% for the next 20 days, further no daily wage as to be provided by the employer in 12 month period. An employer may terminate the contract in case of excessive sick leave taken.

            Maternity Leave and Pay under Article 37 & 38

Female employees are entitled to a minimum of 65 days leave having served for at least a year. However, with less than one-year service, 65 days leave is entitled provided unpaid leave. The employee shall provide notice 8 weeks prior with a certificate of a medical practitioner. This shall also include for the adoption of not less than 5 years old child. Public Holiday(s) falling during the maternity leave, the latter shall be exceeded thereby.  An employer is entitled to receive full daily wage for first 33 days and half her daily wage for the next 32 days only.

Paternity Leave and Pay under Article 39

Male Employees are entitled up to 5 workdays leave having served for at least a year. All the leave are paid hereby and further details and requisites are same as the above.

Public Holidays and Pay under Article 32

All the employees are entitled to a paid holiday on a public holiday declared by the UAE, competent authority. In any case, the employee works on a public holiday, the employer is required to give an additional leave, or provide a daily wage.

Provisions related to the Payment of Salary of an Employee

  • An employee is entitled to receive a written pay statement of each pay period, which includes salary amount, and any deductions if made (Under article 15).
  • An employer is required to pay the full salary of the employee within 14 days of his termination date. (Under article 19).
  • NO deductions shall be made by the employer unless the deductions are ordered by DIFC court, overpayment and to settle the overpayment, or otherwise. (Under article 20).

Discrimination and Victimization under the Act

The following is mentioned in article 59 & 60

An employer is required not to discriminate any employee on grounds of sex, marital status, race, nationality, age, religion, mental or physical disability, and any other. The law also sets out that, an employer shall render the post previously worked on before going on leave, no provision or criterion be provided by the employer to any individual employee. In addition, an employer is required not to victimise an employee.

Notice Period and Termination of Employment

Minimum Notice Periods under article 62

Both the employer and employee have the right to terminate the employment; provided which the party shall send the notice;

  • Seven days if the period of employment is less than 3 months
  • Thirty days if the period of employment is less than 5 years
  • Ninety days if the period of employment is more than 5 months

Termination of employment under article 63

An Employer or Employee shall have the right to terminate an employment agreement where the conduct of either party warrants for termination. If an employee terminates, the employee is entitled to, gratuity payment, any payment in lieu of daily wage and during the vacation leave.  Where an employer terminates, the employee only gratuity payment and outstanding vacation leave shall be calculated and paid.  

End of Service Gratuity under article 66

Employee completing more than one year is entitled to gratuity payment upon termination accordingly:

  • Twenty – one days basic wage for each year of the first five years
  • Thirty days basic wage for each year after five years of service
  • The daily rate of the employees’ basic wage shall be calculated with the number of days in the year
  • In case an employee is a GCC national, the employee is not entitled.

Courts and Jurisdiction

The Small Claims Tribunal or the DIFC’s main courts are the main tribunals having jurisdiction to hear labour complaints in the DIFC. Parties have the right to appeal against decisions of the Small Claims Tribunal. Permission to appeal must be granted first. The decision of the Court of Appeal is final.


The article intends for an overview of the Employment Law. Further, it show causes the basic requisites and excerpts of the said law. From the creation of the Employment Contract, essentials, to whom the law is applied, how it is applied, and what are the benefits of the law with provisions prescribed for an employer and employee. Nothing in the above article is a piece of legal advice nor to discriminate any individual.

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