Federal Decree-Law No. 9/2024, effective from 30 August 2024, has brought significant modifications to the UAE Labour Law. These updates focus on enhancing the enforcement of employment rights and imposing stricter penalties for non-compliance. The recent revisions target unscrupulous employers and aim to bolster protection for both employers and employees.
The revised Articles 54 and 60 of the UAE Labour Law impact all private companies in the UAE, with exceptions for entities based in the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM).
Key Changes and Implications:
Resolution of Employment Disputes (Article 54):
The Ministry of Human Resources and Emiratization (MoHRE) maintains its pivotal role in mediating employment disputes. New updates empower the MoHRE with decisions carrying the weight of a writ of execution. Parties now have the right to appeal MoHRE rulings to the Court of First Instance within 15 working days, ensuring prompt adjudication and a final, non-appealable decision. The time frame for case resolution has been extended to 30 working days, ensuring efficiency.
Penalties and Compliance (Article 60):
The revisions to Article 60 introduce escalated penalties for contravening employment laws. Previous fines ranging from AED 50,000 to AED 200,000 have been significantly raised, now reaching up to AED 1,000,000. These penalties encompass violations like unauthorized employment and work permit misuse, emphasizing a stringent approach towards compliance. AA groundbreaking addition includes the clause addressing fictitious employment, targeting employers engaging in deceptive labor practices. Fines between AED 100,000 and AED 1,000,000 are imposed on such violators, with penalties multiplied by the number of workers involved. In cases where employees derive benefits from fictitious employment with government entities, employers are mandated to reimburse the value of these benefits without recourse against the employees. These provisions are designed to curb fraudulent practices and preserve the integrity of the labor market.
Enhanced Limitation Period:
The extension of the statute of limitations from one to two years post-termination enables employees to assert their rights within a more extended timeframe, promoting a fairer system that caters to employee interests.
Measures Against Collective Disputes:
To forestall individual conflicts from evolving into widespread disputes with broader implications, the MoHRE can implement preventative administrative measures on establishments. This measure aims to preserve workplace harmony and safeguard public order amid employment conflicts.
Criminal Case Initiation and Settlement (Article 60):
The updated Article 60 introduces mechanisms for initiating criminal cases related to fictitious employment, enhancing oversight and accountability. Employers can now request a settlement before a ruling is issued, provided they pay at least 50 per cent of the minimum fine and return all financial incentives obtained through fictitious employment. Upon settlement payment, the criminal case is deemed closed, offering a path to resolution while upholding consequences for unlawful practices.
In conclusion, the recent amendments to Articles 54 and 60 of the UAE Labour Law underscore a substantial shift towards stringent enforcement measures and enhanced penalties to fortify compliance with labor regulations. By delineating the MoHRE's role in dispute resolution, streamlining the appeal process, and introducing severe penalties for fictitious employment, these updates bolster the legal framework governing employment in the UAE. Employers are urged to familiarize themselves with these changes and ensure full compliance to avert the severe repercussions outlined in the updated legislation.
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