the DIFC Authority is replacing the existing arrangement of statutory end of service gratuity, payable on termination of employment, with a defined contribution savings scheme, in which contributions are made monthly into a scheme (the Qualifying Scheme).

The Qualifying Scheme which is being supported by the DIFC Authority is the DIFC Employee Workplace Savings plan (DEWS). However, employers may choose to use a Qualifying Alternative Scheme (QAS).

The laws implementing the new arrangements, through amendments to DIFC Law No. 2 of 2019 (DIFC Employment Law, as amended) and Employment Regulations (Employment Regulations), have been published in their final form on 14 January 2020.

Key Developments

The key developments are as follows:

• End of service gratuity – end of service gratuity will cease to accrue from 31 January 2020.

1.-Gratuity is not paid out at this date, but will either: Be held by the employer until termination of employment, at which point it must be paid within 14 days of the termination date. The value of the gratuity accrued up to 31 January 2020 will be adjusted to reflect any increases in salary in the period to termination of employment; or

2.-Be paid by the employer into a Qualifying Scheme at any point. Where: – The transfer is with employee consent, the risk of the investment transfers to the employee; –

The transfer is without employee consent, the risk of the investment stays with the employer.

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