UAE: Federal Law on Labour Relations Organisation Issued

14/08/202415/08/2024
by Tanya Jain

Al-Bayan, 12 August 2024: The UAE has issued a new federal decree-law amending provisions of the existing labour relations regulations. This move aligns with the country’s continuous efforts to develop a robust legislative framework that ensures an efficient and competitive labour market.

The primary objectives of the new decree-law are to regulate labour relations in a balanced manner, clearly defining the rights and obligations of all parties involved. Additionally, to provide comprehensive protection for workers and employers, enabling them to exercise their rights within a well-defined legal framework.

Lastly, to enhance the overall competitiveness of the UAE’s labour market.

Stringent penalties have been introduced for violations related to unauthorised employment practices.
Individuals found employing workers without proper authorisation, bringing in workers and leaving them without employment, misusing work permits, or closing facilities without settling workers’ rights will face fines ranging from AED 100,000 to AED 1 million.

Strict measures have been put in place to protect juvenile workers.
Employers found violating provisions related to the employment of minors will face similar hefty fines.
Additionally, individuals who agree to employ juveniles in violation of the law, including those with guardianship or custody over the minors, will also be subject to penalties.
Employers are now mandated to take necessary measures to settle the rights of workers in accordance with the new decree-law, its executive regulations, and related decisions before closing facilities or suspending operations.

The UAE’s proactive approach to enhancing its labour laws demonstrates its commitment to creating a fair and transparent work environment that safeguards the interests of both employers and employees.
These amendments are expected to further strengthen the country’s position as a preferred destination for skilled professionals and businesses seeking a robust and well-regulated labour market.

The UAE Government announced fines ranging up to Dh1 million on Monday after a Federal Decree-Law was issued, amending specific provisions of the Federal Decree-Law on the Regulation of Employment Relationships.

A fine ranging from Dh100,000 to Dh1 million will be imposed on employers for employing a worker without a work permit or bringing them without providing any job. The same fine will also apply for closing a business without settling the rights of workers, taking part in fraudulent labour acts including fraudulent employment or fictitious Emiratisation, employing a minor in violation of the law, and engaging in any act of circumvention of the laws or regulations governing the labour market, including fictitious employment.

As per the new provisions, the penalties will multiply based on the number of workers fictitiously employed.

Additionally, The Ministry of Human Resources and Emiratisation is now authorised to make a settlement provided that the employer pays 50 per cent of the minimum value of the fine and pays back to the government the financial incentives obtained by the fake employees.

The new decree stipulates that any criminal proceedings for fictitious employment, including fake Emiratisation, can only be initiated at the request of the Minister of Human Resources and Emiratisation or his/her authorised representative.

The decree also states that any disputes between employers and employees should be referred to the Court of First Instance rather than the Court of Appeal, if there is a disagreement with the decision made by the Ministry of Human Resources and Emiratisation in resolving the dispute.

This applies to all cases except for those disputes that have been adjusted or reserved for the issuance of a judgement.

Starting from the date of implementation of the provisions, the Court of Appeal is required to refer all requests, disputes and grievances regarding the regulation of employment relations to the Court of First Instance.

As per the new provisions, the court shall revoke proceeding with any claims filed after two years from the termination of the employment relationship.

This decree is part of the country’s ongoing efforts to develop its legislative and legal framework.
It aims to ensure the efficiency and competitiveness of the labour market, regulate employment relationships, and clearly define the rights and obligations of all parties involved, and ensure their protection by law.