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Combating coronavirus: New DIFC directive offers greater protection to companies, employees

Issac John/Dubai
Filed on April 26, 2020 | Last updated on April 26, 2020 at 02.11 pm
coronavirus, covid-19, decree, DIFC, Dubai International Financial Centre, presidential decree

Any DIFC-based employee who contracts Covid-19 or has been quarantined by the local authorities will retain full remuneration.

Government-related entities in Dubai have rolled out a string of measures aimed at helping companies and employees overcome challenges posed by Covid-19 outbreak and ensure business continuity.

Dubai International Financial Centre offered greater flexibility to DIFC-based employers and increased protection to employees, while Dubai Airport Freezone Authority has launched a set of economic incentive packages, which aim to support companies based in Dafza.

All the initiatives by these entities seek to ensure business continuity across various sectors while helping companies and employees mitigate the severity of the economic impact.

In alignment with the UAE government's support and relief measures, Shuaa Capital, a leading investment banking platform, announced it would provide free expert advisory services and interest-free loans through regulated partners to support UAE-based small and mid-sized technology enterprises that have been directly impacted by Covid-19.

Dafza initiatives aim to enhance companies' ability to adapt to the global fluctuations by providing them the flexibility to deal with the impact of the current economic situation.

Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dafza, said the incentive package seeks to reduce the impact of this crisis on businesses. "This initiative reflects our commitment to providing the ideal environment for them to ensure their business continuity and to help develop and grow their operations despite the fluctuations and global economic conditions. This package will support companies through these exceptional circumstances that have unexpectedly affected various businesses sectors and activities."

 "Dafza is a key partner for many companies operating in more than 20 vital sectors within the free zone. We reassure companies during these difficult times that their companies' investments and businesses are in a safe place and that we will overcome this crisis stronger," said Sheikh Ahmed.

 In a directive, the DIFC said companies operating in the financial free zone would have the ability to adopt emergency measures necessary to sustain business operations and retain financial interests of employees. As per the directive, employers can now impose reduced working hours, paid or unpaid leave, reduced pay, restrict workplace access and put in place remote working conditions without the consent of their employees for the duration of the emergency period (21 April 2020 until 31 July 20200. "The primary motivation of the directive is to make it easier for DIFC employers to impose temporary changes to their employees' terms of employment, which in turn will reduce the likelihood of employers having to resort to terminate employment of their staff."  

The DIFC directive ensures that any employee based in the free zone that contracts Covid-19 or has been quarantined by the local authorities to limit the spread of the virus, will retain full remuneration. "This is in respect of their Covid-19 related sick leave pay and any such sick leave shall not be counted towards their annual sick leave entitlement."

"Employers may also defer the visa cancellation process for their terminated employees to avoid any unnecessary hardship for them provided the employers continue to provide basic medical insurance cover. Employees working in the retail, service and hospitality sectors must also be provided accommodation in such circumstance," DIFC statement said.

The directive also protects employees' end-of-service gratuity accrued prior to the recent introduction of DEWS. The gratuity payments for a terminated employee's gratuity payment will be calculated on their basic salary as of 29 February 2020 to ensure that any subsequent reduction of pay does not affect what they receive.

Essa Kazim, Governor of DIFC, said the severity of the Covid-19 situation on businesses cannot be understated and we have a clear responsibility to do everything possible to mitigate its impact. "Through the new DIFC directive, we intend to provide companies and their employees with certainty and flexibility in a practical way that will help see them through this challenging crisis."

Dr. Mohammed Al Zarooni, Director General of Dafza, said the new incentives reaffirm the free zone's continuous efforts to provide all forms of support to its customers and companies based in the free zone. "This initiative comes as a complement to a series of facilities and support services that we provide to companies during this situation, which is affecting their operations and might lead them to difficult conditions in the short and long term."

Jassim Alseddiqi, Chief Executive Officer of Shuaa Capital, said small and mid-sized technology companies are an integral part of the UAE's economy and society and will spearhead post-Covid-19 economic recovery. "Our support package will help empower those firms to continue to create innovative products and services in key sectors for our nation."

Dafza package includes postponing lease payments for up to three months and facilitating the financial payments into easier monthly installments. It supports retailers operating within the free zone by exempting them from lease payments for a period up to three months. The free zone will refund the security deposits on the leased spaces and labour guarantees to companies and will also exempt new companies from the registration and licensing fees. Dafza will cancel companies' fines as well.

Other DIFC measures include making available employee database created for those who are made redundant, with employer required to assist re-employment; clarity on privacy and cyber-security related obligations of DIFC firms for remote working conditions; and temporary suspension of the wrongful trading obligations of companies based in the centre under the DIFC Insolvency Law. 

issacjohn@khaleejtimes.com


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