The UAE has long been a hub for professionals from around the world, with expatriates making up a significant portion of its workforce. To ensure a balanced and efficient labor market, the country continuously refines its legal framework. The latest amendment to the UAE Labour Law, introduced through Federal Decree-Law No. 9 of 2024, brings notable changes that affect both employers and employees. This article provides an in-depth look at these updates and their implications.
1. New Mechanism for Labour Dispute Resolution
Under the new amendment, the Ministry of Human Resources and Emiratisation (MoHRE) plays a stronger role in resolving labor disputes. Employers and employees must first submit their complaints to MoHRE, which will attempt to mediate an amicable resolution. If the dispute remains unresolved or involves a claim below AED 50,000, MoHRE now has the authority to issue a binding decision, making the process faster and more efficient.
If either party contests MoHRE’s ruling, they can appeal to the Court of First Instance within 30 working days, replacing the previous process where disputes could be directly escalated to the Appeals Court. This amendment streamlines dispute resolution and ensures that smaller claims do not face lengthy legal proceedings.
2. Increased Penalties for Labour Law Violations
The amendments introduce stricter penalties for violations, reinforcing compliance with the law. Companies found guilty of the following offenses will face fines ranging from AED 100,000 to AED 1 million:
- Employing individuals without a valid work permit.
- Failing to provide employment after sponsoring workers.
- Misusing work permits for purposes other than their original intent.
- Closing a business or suspending operations without settling employee entitlements.
- Engaging in fictitious employment (such as false Emiratisation hires to obtain government benefits).
In cases of fraudulent employment, the penalties increase based on the number of individuals involved. Employers found guilty of fake Emiratisation hires will also be required to return any government incentives they received, with potential criminal prosecution initiated by MoHRE.
3. Enhanced Employee Protections
To prevent financial hardships caused by prolonged disputes, MoHRE now has the authority to require employers to pay wages for up to two months if an unresolved dispute affects an employee’s salary. Additionally, employees now have up to two years from their termination date to file labor-related claims, extending the previous limitation period and offering greater legal protection.
4. Reinforcement of Emiratisation Policies
The UAE continues to encourage Emirati workforce participation in the private sector. The amendment strengthens enforcement against companies that falsely report hiring Emiratis. With penalties escalating based on the number of fraudulent hires, the government aims to ensure that Emiratisation programs genuinely benefit UAE nationals.
5. Implications for Employers and Employees
These changes reflect the UAE’s commitment to:
- Speeding up dispute resolution and reducing court congestion.
- Encouraging ethical hiring practices and penalizing businesses that misuse employment regulations.
- Enhancing job security by ensuring timely salary payments and extending the period for legal claims.
Employers must ensure they remain compliant by:
- Verifying that all employees have valid work permits.
- Honoring employment contracts and ensuring legitimate hiring practices.
- Reporting any business closure or suspension through the proper channels to avoid penalties.
Conclusion
The latest amendments to the UAE Labour Law reinforce fairness, compliance, and efficiency in the job market. Employers must review their HR policies to ensure compliance with the new rules, while employees now have stronger protections when facing disputes.
At FS Legal Services, we are committed to guiding businesses and professionals through these regulatory changes. Whether you need legal advice on employment matters or assistance with compliance, our expert team is here to help.
For further insights or legal consultation, feel free to contact FS Legal Services today.