Earlier in June of this year DIFC Law No. 3/2009 DIFC Insolvency Law was repealed and replaced by DIFC Law No. 1/2019 DIFC Insolvency Law. DIFC Law No. 1/2019 reaffirms the DIFC's commitment to meeting the highest international standards and practices and to facilitating a more efficient and effective bankruptcy and restructuring regime.

Two months after the introduction of DIFC Law No. 1/2019 , DIFC Law No. 2/2019 DIFC Employment Law came into force. Significant changes were introduced in DIFC Law No. 2/2019 including, for example, a cap on the penalty payment in respect of the late payment of termination dues and five days paid paternity leave. In an insolvency context, the key employment law change has been the review of the statutory end of service gratuity regime which will be replaced with a defined-contribution pension scheme due to come into force on 1 January 2020. We discuss the impact of this change in more detail below.

This Practice Note examines the DIFC insolvency regime in the context of the employment relationship and considers what impact the proposed new pension regime will have in practice.