Economic Stimulus Package by DIFC (3.0)
Dubai International Finance Centre (DIFC) has come out with the new Presidential Directive no. 04 of 2020, also known as DIFC Covid-19 Directive. It sets out emergency measures for employers and employees in the freezone impacted by the coronavirus pandemic.
- Validity – the resolution is effective from April 21, 2020, until July 31, 2020, as a measure to protect employers
- Emergency Employment Measures – the directive allows employers to implement measures without the employee’s consent and with 5 days written notice to impose,
- Reduced working hours
- Paid or unpaid leave
- Reduced pay on a temporary basis
- Workplace access restrictions
- Remote working conditions (including measuring employee engagement and productivity)
The deployment of such emergency measures helps employers to alleviate short-term cash flow concerns while for the employees it provides protection towards gratuity payments, sick leave and visa cancellation.
The new legislation stipulates that,
- If an employee’s basic salary has been reduced after March 1, the February 29 based basic salary will be used for end-of-service gratuity calculation.
- Any sick leaves taken related to Covid-19 or even quarantine, will not be counted towards the sick leave entitlement under DIFC Employment Law. Employees will be entitled to full pay for the above leaves as long as the sick leave certificate is valid and the quarantine is imposed by Competent Authority.
- For any employee terminated between March 1 to July 31, employers can defer the visa cancellation as long as they continue to provide basic medical insurance cover and if the accommodation was provided by the company, they should continue to provide during such time.
The directive requires more than 2,400 DIFC employers to maintain a list of employees terminated or put on unpaid leave as the Government Service Office will aim to place these laid-off employees, further to their consent through the “Available Employee Database” searchable by DIFC employers looking to hire.
How can we help
Rethink as an outsourced Partner using the best practices, can assist in the set-up of a BCP plan for your organization. We are certain that the crisis will affect most businesses within the UAE and we are convinced that firms need to consider some immediate actions to make it through the next few weeks and months, which we will be able to assist you with as below,
- Cash flow forecasting and payment prioritization
- Employee structuring and salary strategy management
- HR & Communication support
- Strategic business opportunities