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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
The Dubai International Financial Centre (“DIFC”) has now published an important new Presidential Directive No. 4 of 2020, otherwise known as the DIFC COVID-19 Directive, which can be found here and is effective from 21 April 2020 (the “Directive”).
The Directive has been introduced in response to the COVID-19 outbreak to address the related issues currently being faced by employers and employees within the DIFC. The Directive is intended to be in force until 31 July 2020 (pending any later decision by the DIFC to extend the duration of the applicability of the Directive) (the “Emergency Period”).
We summarise the key provisions of the Directive as follows:
The Directive introduces a number of emergency employment related measures which a DIFC employer may, during the Emergency Period, lawfully implement without first obtaining employee consent being:
(collectively referred to as the Emergency Measures”)
An employer is required to notify any affected employees in writing at least 5 days’ in advance of implementing any of the Emergency Measures.
During the Emergency Period, employers will be required to maintain a list of (i) any terminated employees (an employee who is terminated during the period from 1 March 2020 up to the end of the Emergency Period) and; (ii) any employees that are surplus to its current requirements. This information will be provided to the Government Services Office who (with the employee’s consent) shall create and maintain a virtual labour market during the Emergency Period known as the “DIFC Available Employee Database”. Any DIFC Employer wishing to hire during the Emergency Period can utilise the DIFC Available Employee Database for recruitment purposes.
The Directive provides that any sick leave taken by an employee during the Emergency Period as a consequence of either (i) having contracted COVID-19 (as confirmed by a sick leave certificate issued by a ‘Competent Authority’ such as the Dubai Health Authority or Ministry of Health and Prevention) or; (ii) being placed in quarantine by any Competent Authority to deal with limiting the spread of COVID-19, shall not count towards any sick leave entitlement that an employee is entitled to under the DIFC Employment Law.
Employees will be entitled to full pay during any COVID-19 sick leave period (for as long as the sick leave certificate is valid and/or the quarantine is imposed by the Competent Authority), and may not be subjected to any Emergency Measure that did not apply to them prior to any such sick leave period.
The Directive further provides that it will not be permissible to terminate the services of an employee who has taken more than the maximum aggregate 60 working days of annual sick leave entitlement under the DIFC Employment Law because of any COVID-19 related sick leave.
The Directive ensures that any end of service gratuity payments will not be effected by the implementation of any Emergency Measures as follows:
Significantly, the Directive does not provide for payment protection during the Emergency Period for any mandatory employee workplace saving scheme contributions, and therefore these contributions should be calculated with reference to the employees’ applicable basic salary at the time when the employer contribution to the scheme is due to be transferred. For example, if an employee was placed on unpaid leave and was not in receipt of a basic salary as at the applicable monthly pay period, a contribution would not require to be made by the employer to the DIFC employee workplace savings scheme.
Under the Directive it will be permissible for employer’s to defer the cancellation of any terminated employees’ residency visas and/or sponsorship (post the 30 days’ statutory limitation period). However, in these circumstances no rights or benefits shall accrue under the DIFC Employment Law in favour of the terminated employees (with the exception of health insurance which will require to be maintained by the employer for as long as the visa is active).
Employers in the retail, service or hospitality industry who provide employees with accommodation as part of their employment contract, will require to continue to provide accommodation to those employees until the cancellation of their residency visa.
In summary, the Directive sets out much extended measures which an employer is lawfully permitted to implement as a result of the COVID-19 outbreak resulting in a significant departure (albeit on a temporary basis) from the obligations set out under the DIFC Employment Law. On the other hand, the Directive affords protection to employees who fall sick as a result of COVID-19 and also in respect of visa cancellation timelines should employment be terminated.
If you have any questions or wish to discuss in more detail, please do not hesitate to contact us.
Partner, Head of Employment & Incentives
Partner, Employment & Incentives
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