In a decisive move to enhance the UAE’s labor law regulatory framework, the government unveiled significant amendments to the Federal Decree-Law on the Regulation of Employment Relationships. As part of these changes, fines reaching up to Dh1 million have been stipulated for specific infractions.
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.
Overview of New Penalties
Employers now face fines ranging from Dh100,000 to Dh1 million for several severe violations, including:
Employing Workers Without Permits
Any instance of engaging a worker without a valid work permit or importing them without securing employment will trigger substantial fines.
Business Closure Without Worker Compensation
Employers who close their businesses without settling workers’ rights will incur heavy penalties.
Fraudulent Employment Practices
This includes any form of deceptive employment practices, such as fraudulent Emiratization or fictitious employment.
Illegal Employment of Minors
Employing minors in defiance of the law will result in significant sanctions.
Circumvention of Labor Laws
Engaging in any activity that seeks to bypass the established labor market regulations, including fictitious employment, will be strictly penalized.
Penalties will escalate proportionally to the number of workers fictitiously employed, underscoring the government’s zero-tolerance stance on such activities.
Settlement and Legal Proceedings
The Ministry of Human Resources and Emiratization (MOHRE) now holds the authority to negotiate settlements, provided the employer agrees to pay at least 50% of the minimum fine and reimburse the government for any financial incentives improperly obtained by the fake employees.
Furthermore, the decree specifies that criminal proceedings related to fictitious employment, including false Emiratization claims, can only be initiated by the Minister of Human Resources and Emiratization or their authorized representative. This streamlined approach aims to ensure targeted and effective enforcement.
In terms of dispute resolution, any disagreements between employers and employees will be directed to the Court of First Instance. This shift from the Court of Appeal, except for cases reserved for judgment issuance, is designed to expedite the resolution process and provide clearer guidance on employment disputes.
Timelines and Jurisdiction
Effective immediately upon these provisions’ implementation, the Court of Appeal refers all employment-related grievances to the Court of First Instance. Additionally, the new law mandates that any claims filed more than two years after the termination of the employment relationship will be dismissed, encouraging prompt resolution of disputes.
Implications for the Labor Market
This decree marks a significant stride in the UAE’s ongoing efforts to fortify its legislative and legal frameworks. By clearly delineating the rights and obligations of all parties, the government aims to boost the efficiency and competitiveness of the labor market, ensuring robust protection under the law.
These amendments not only signal the UAE’s commitment to fostering a transparent and fair labor environment but also serve as a stern warning to those contemplating circumventing the established legal protocols.
