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New DIFC Employment Law - Penalties

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Under the old employment law, there was a penalty provision which essentially said that an employer had to pay all monies owed to an employee within 14 days of the termination date. If the employer failed to pay that money, then the employer was required to pay a penalty of a day's wage for every day that the employer had failed to pay the employee. This actually led to a number of cases in the DIFC courts where employees were able to successfully claim substantial amounts of money, often far in excess of the monies that were actually owed to them because of the accrual of this penalty. At the time, the DIFC courts essentially said that although it could lead to unreasonable decisions, they had no discretion to amend that provision in the law. The new employment law tries to address this by introducing a minimal provision. So in other words, the employee needs to be owed at least an amount equal to their weekly wage. In addition, if there is a genuine dispute between the parties that is going through the courts, the penalty will not accrue. And finally, if the employee is acting unreasonably and that is the reason why the monies have not been paid, then again the court has the discretion not to award the penalty. So this is really good news for employers although, ultimately, the employer still does have to pay the monies owed to an employee. What is helpful is that the new employment law specifies what that money is. So it is the remuneration owed to an employee, excluding any long term incentive payments which would not otherwise be due on termination of employment. Also, the employee should receive their gratuity and any accrued but untaken annual leave.

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Duration: 2 minutes and 13 seconds
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Language: English
License: Dotsub - Standard License
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Views: 2
Posted by: clydecomarketing on Oct 4, 2019

The DIFC Authority has recently announced the release of the new DIFC Employment Law, which has come into force on 28 August 2019. We have prepared a series of short videos to address some of the key enhancements and implications of the new Employment Law that every DIFC-based employer should be aware of.
In this video, Rebecca Ford outlines all you need to know about penalties.

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