The UAE has recently completed a significant transformation of its labour laws, with key amendments that took effect on August 31, 2024. These changes, part of Federal Decree-Law No. 9 of 2024, aimed to enhance the protection of worker rights and strengthen labour regulations throughout the country. Article 54 of the UAE Federal Decree-Law No. 33 of 2021, which governs labour relations, underwent substantial revisions through Article 1 of Federal Decree-Law No. 20 of 2023 and was further amended by the article 1 of Federal Decree-Law No. 9 of 2024, the new decree. The updated provisions reflect the UAE’s commitment to fostering a more equitable work environment that aligns with global standards and addresses the evolving needs of the workforce. This article will focus on three major amendments: increased fines for labour violations, an extension of the statute of limitations for labour claims, and a streamlined dispute resolution process. These changes aim to create a more just and equitable labour environment in the UAE. 

Increased fines for labour violations

The UAE government has recently introduced stricter penalties for employers who violate labour laws. The new decree adds a provision in Article 60(2) that establishes fines ranging from AED 100,000 to AED 1,000,000. Some violations that could result in hefty penalties include employing workers without work permits, closing a business without settling employee rights, engaging in fraudulent labour practices, employing minors illegally, and circumventing labour market regulations. The purpose of these increased penalties is to deter employers from breaking the law and to ensure that they comply with labour regulations more closely. 

Disambiguation: This article discusses UAE Federal employment laws. For ADGM labour laws, please refer to ADGM Employment Laws. For DIFC labour laws, please refer to DIFC Employment Laws.

Extension of statutory limitations for two years for labour claims

 The UAE government has recently extended the time limit for filing labour claims for both employers and employees. The statutory limitations for filing labour claims have been extended from one (1) year to two (2) years from the date of employment termination according to Article 54 (9) of the Labour Law. This extension, introduced through amendments to the UAE Federal Decree, is designed to give employers and employees more time to assess their rights and obligations under the law. Previously, the shorter statute of limitations could sometimes lead to situations where employees could not pursue their claims due to delays in realizing they had been wronged or difficulties in gathering evidence. The new law aims to address these concerns and ensure that individuals have a fair opportunity to seek justice. 

Streamlined dispute resolution process

 The UAE government has implemented significant changes to streamline the process for resolving labour disputes. These amendments, introduced through updates to the UAE Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (the UAE Labour Law), address the handling of claims, appeals, and the role of the Ministry of Human Resources and Emiratisation (“MOHRE”). 

Smaller claims

For claims that do not exceed AED 50,000, MOHRE will have the authority to make final decisions, which are now immediately enforceable. This means that employees and employers can expect a quicker and more straightforward resolution for smaller disputes. 

For larger claims

For Claims above AED 50,000, MOHRE will still be a mediator. If the parties cannot agree, the matter will be referred to a competent court. 

Changes in Appeal Process

Previously, appeals for disputes arising from MOHRE decisions went to the Court of Appeal. However, under the new decree, any party dissatisfied with the Ministry’s decision must file a lawsuit directly with the Court of First Instance. This eliminates the appeals stage and introduces a new legal process. 

Stricter Time Limits

The new law also imposes stricter time limits for filing claims and appeals. Parties involved in disputes with MOHRE rulings have only 15 working days from the date of notification to file a lawsuit with the Court of First Instance. Additionally, the Court of First Instance must dismiss any claims filed beyond the two-year statute of limitations after employment termination. This emphasizes the importance of timely action in seeking resolution. 

MOHRE Decisions Now Enforceable

Another significant change is that decisions made by MOHRE are now legally enforceable according to amended Article 54. This means that MOHRE’s rulings can be treated as court orders, giving them more authority and reducing the need for lengthy legal processes. This change is expected to make it easier for employees to enforce their rights and for employers to comply with labour laws. 

Salary Continuation During Disputes

MOHRE has implemented a provision for salary continuation during employment disputes, empowering employees and enhancing their financial security. This amendment mandates that employers must continue to pay employees for up to two (2) months while disputes are being resolved. This change is crucial as it ensures financial stability for employees during potentially protracted resolution processes and underscores the commitment to fair treatment in the workplace. Additionally, if the parties involved do not settle the dispute within 14 days, MOHRE has the authority to escalate the dispute to a competent court. 

The UAE has significantly updated its labour laws in 2024 to enhance worker protection and flexibility. Key differences include the introduction of salary continuation during disputes, revised notice periods for probation termination, the allowance of flexible working arrangements, updated claim value limits for labour disputes, an increase in maternity leave, and stricter Emiratization requirements. These amendments aim to create a more balanced and fair working environment that supports economic growth while protecting workers’ rights and ensuring the UAE’s labour market remains competitive and aligned with global best practices. The 2024 labour law amendments demonstrate the UAE’s commitment to creating a more equitable and supportive work environment. By modernizing employment regulations and aligning them with global standards, the country aims to attract and retain a skilled workforce while promoting economic growth.