DIFC announced Proposed Amendments to the Employment Law, Data Protection Law and Insolvency Law for Public Consultation

Dubai, UAE – 25 February, 2021: Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, has proposed the enactment of legislation to enhance the regulatory framework in the DIFC, bringing it in line with international best practice. In doing so, DIFC Authority has taken into account specific factors relating to the DIFC and the need to provide an appropriate regulatory environment for businesses to operate in or from the Centre.

The Consultation Papers seek public comments on various legislative proposals:

  1. Amendments to the Employment Law, DIFC Law No. 2 of 2019 and the Employment Regulations is the subject of Consultation Paper No. 1 of 2021; and
  2. Amendments to the Data Protection Law, DIFC Law No. 5 of 2020, as well as the Insolvency Law, DIFC Law No. 1 of 2019 and Insolvency Regulations 2019 are the subject of Consultation Paper No. 2 of 2021.

An overview of the key features of each legislative proposal is summarised below:

Consultation Paper No. 1 of 2021 – Amendments to the Employment Law & Regulations

The DIFC intends to make amendments to the existing Employment Law No. 2 of 2019 and issue new Employment Regulations which are intended to provide further clarity in relation to the Qualifying Scheme regime and to address other areas of uncertainty in the law.

Key aspects of the regime include:

(a) Amendments to Employment Law to clarify:

(i) the application of limitations periods to claims made under the Employment Law (including claims for deductions to an Employee’s Remuneration);

(ii) the accrual of vacation leave and the duration of the probationary period for short term fixed-term contracts; and

(iii) certain defined terms used in the law;

(b) Amendments to the basic workplace health and safety requirements under the Employment Law to account for working from home arrangements; and

(c) The new Employment Regulations propose to make amendments to the Qualifying Scheme regime:

  1.  i.to bring it in line with DFSA’s Employee Money Purchase Scheme so that only a single layer of regulation is applied to these schemes;  and
  2. ii. from a practical fitness for purpose and consumer protection perspective. 

 Consultation Paper No. 2 of 2021 – Proposed Amendments to DIFC Legislation

The DIFC intends to make amendments to the existing Data Protection Law No. 5 of 2020.

The key aspects of the legislative proposal include:

(a) clarifying the process for judicial redress for individuals to more closely align with international best practice, especially in light of recent precedent-setting rulings in Europe regarding data subjects’ rights;

(b) setting out better accountability requirements for Controllers and Processors where individuals’ rights may be impacted where a request for access to data is considered vexatious or repetitive;

(c) refining the powers of the Commissioner regarding available information when rendering a direction or determination of contravention of the DP Law; and

(d) aligning with the intention of DIFC Courts Law regarding the imposition and payment of court costs by DIFC Bodies.

The DIFC also intends to make amendments to the Insolvency Law No. 1 of 2019 and Insolvency Regulations 2020 to:

(a) provide greater flexibility in relation to the requirement to obtain a bond under the Insolvency Law and Regulations, as bonding arrangements are not currently available in the UAE for insolvency practitioners;

(b) ensure consistency in liquidator's reporting obligations for the different types of liquidation procedures available under the Insolvency Law;

(c) ensure that that the vesting of property in a dissolved entity is consistently applied  for all DIFC entities (including recognised companies) under the provisions of Article 32 of the Operating Law, DIFC Law No. 7 of 2018; and

(d) miscellaneous amendments including the removal of some erroneous references to the DFSA in Regulation 7 of the Insolvency Regulations.

The above legislative proposals have been posted for a 30-day public consultation period with the deadline for providing comments ending on 28 March, 2021.

The consultation papers and legislative proposals can be accessed by visiting our Consultation Papers page.

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