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The UAE government’s recent updates to its Labour Law have been introduced as part of an ongoing effort to strengthen the integrity and fairness of its labor market. These amendments signal a clear commitment to ensuring the rights of employees, holding employers to higher standards, and making the dispute resolution process faster and more accessible. Here, we examine the updates in detail, highlighting how these changes aim to benefit the workforce and create a more transparent, compliant environment for businesses.
1. Major Changes in Labour Law: An Overview
The UAE’s labour landscape is undergoing a dynamic transformation, thanks to the recent decree that amends the Federal Labour Law. This amendment is a direct response to the growing need for stronger, clearer regulations that protect both UAE nationals and expatriate employees. The law now places particular emphasis on:
Reducing exploitation by establishing strict penalties for non-compliance.
Ensuring real employment opportunities for UAE nationals through an anti-fictitious Emiratisation initiative.
Simplifying the resolution process for labor disputes, thereby reducing the time and burden on the judiciary.
Requiring employers to act responsibly in the treatment of their employees and businesses, even in challenging times like closures or shutdowns.
Together, these changes reflect the UAE's ambition to create a labor market that balances opportunity with accountability, placing the UAE on the global map for employment standards.
2. Stricter Penalties for Non-Compliance: A Move Toward Accountability
A fundamental part of these amendments involves stricter fines and penalties for non-compliant employers. Under the new regulations, employers who fail to adhere to proper employment practices face fines that can range from AED 100,000 up to AED 1 million.
Here are some specific violations and the associated penalties:
Employment without proper permits: Any employer who hires workers without valid work permits will incur fines. This step is aimed at safeguarding employees who could otherwise face exploitation or insecure working conditions.
Failure to provide employment after hiring: Employers who bring workers into the country but fail to provide them with the promised jobs will face severe penalties. This protects workers from being left vulnerable and ensures that businesses follow through on their commitments.
Illegitimate closure of business without settling employee rights: If an employer shuts down a business or suspends its activities without first addressing workers’ rights, significant fines will be levied. This ensures that workers are not left without compensation or benefits after business closures, which often impact their livelihoods.
Illegal employment of minors: Hiring minors outside of legal permissions or conditions will be penalized, both as a deterrent and as a safeguard for young workers who may be more vulnerable to exploitation.
By imposing these strict penalties, the UAE government demonstrates a strong stance against employment malpractice, signaling that protecting workers is a top priority.
3. Tackling Fictitious Employment and Ensuring Real Emiratisation
The UAE has made it clear that fictitious employment, including false Emiratisation, will not be tolerated. Fictitious employment refers to the practice of falsely claiming to employ UAE nationals, sometimes to meet Emiratisation targets without genuinely creating employment opportunities for them. Under the new amendments:
Employers caught faking the recruitment of Emiratis will face fines between AED 100,000 and AED 1 million for each worker involved. This fine increases proportionately with the number of workers, creating a strong financial disincentive for such practices.
The law addresses "fictitious Emiratisation," where companies might claim to hire Emirati employees simply to meet certain quotas or eligibility criteria for incentives. By introducing fines, the government is actively promoting genuine employment for UAE nationals.
This amendment aligns with the UAE's broader goal of creating real opportunities for Emirati citizens and emphasizes the importance of building a credible labor market that serves the interests of both businesses and employees.
4. Faster and More Efficient Dispute Resolution Process
The decree also aims to streamline the process of resolving labor disputes by moving such cases to the Court of First Instance. This shift is intended to provide faster access to justice, eliminating some of the delays associated with appeals and lengthy legal procedures. Under the new regulations:
Disputes are resolved at the Court of First Instance instead of the Court of Appeal, simplifying the process and enabling quicker resolutions.
Two-year limitation for claims: The law now stipulates a two-year period after the end of an employment relationship to file claims, encouraging timely dispute resolutions and clarity in the employment lifecycle.
These changes reflect a shift toward a more accessible and efficient legal process, reducing the administrative burden on both the judiciary and the individuals involved in employment disputes.
5. Criminal Proceedings for Fictitious Employment
Ministry Authorization Required
Another key feature of the amendment is the stipulation that criminal cases related to fictitious employment will only proceed if authorized by the Ministry of Human Resources and Emiratisation (MOHRE). This provision centralizes control over such cases and ensures that the ministry is fully aware of and involved in any proceedings related to fraudulent employment activities.
Settlement option for employers: For employers seeking to resolve such cases before a court judgment, there is an option to settle the matter. Employers may do so by paying at least 50% of the minimum fine and returning any financial incentives gained through fictitious employment. This provides a fair opportunity for businesses to correct their course while still holding them accountable for their actions.
This approach balances strict enforcement with a degree of flexibility, encouraging compliance and fostering an environment where businesses can make amends if needed.
6. A New Era of Labor Compliance and Opportunity in the UAE
With these amendments, the UAE reinforces its dedication to a transparent, compliant labor environment that supports both employee rights and business success. The introduction of stricter penalties for violations, along with measures to combat fictitious employment, underscores the UAE’s commitment to a robust legal framework where businesses are held accountable and workers are supported.
How Juris Maestro Supports Your Journey in Compliance
At Juris Maestro Law Firm, we’re more than just legal advisors—we are your partners in building a compliant, empowered, and well-protected workforce. Our team is dedicated to helping businesses navigate the nuances of UAE labor law, ensuring that your practices are in full alignment with the latest regulations. We understand the complexities of the labor landscape and offer tailored advice to keep your business protected and thriving.
Whether you need guidance on regulatory compliance, dispute resolution, or adapting to the latest labor law changes, Juris Maestro stands ready to support you every step of the way. By choosing Juris Maestro, you’re securing a future where your business operates with integrity, compliance, and a commitment to excellence in the UAE’s evolving legal environment.