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On 29 July 2024, the UAE introduced Federal Decree Law No. 9 of 2024 (the "Amendment"), which significantly revises Federal Decree Law No. 33 of 2021 (the "Labour Law"). Effective from 31 August 2024, these amendments bring essential changes that impact both employers and employees across the UAE, especially regarding labour disputes and employer penalties. Here’s what you need to know.

Key Changes to Individual Labour Disputes

One of the most notable revisions is to Article 54, which introduces a two-year time bar for filing individual labour disputes. Employees now have up to two years from their employment termination date to initiate any legal action.

Additionally, claims under AED 50,000 are streamlined under the new law, with the Court of First Instance handling final appeals for small claims rather than the Court of Appeal. This change is designed to expedite the resolution process for smaller labour disputes, providing more efficiency for both parties involved.

Increased Penalties for Employer Violations

Significant amendments have been made to Article 60 of the Labour Law, focusing on employer violations. The penalty cap has been significantly raised, from AED 200,000 to AED 1 million, signaling the UAE’s strong commitment to safeguarding worker rights.

Employers must be aware of the enhanced penalties for the following violations:

• Employing Workers Without a Work Permit: All employees must have valid work permits.
• Recruiting Without Actual Employment: Recruiting employees without providing genuine work could lead to severe fines.
• Misusing Work Permits: Work permits should only be used for their intended purposes.
• Closing an Establishment Without Settling Employee Rights: Employers are required to settle all outstanding entitlements before closing or suspending operations.
• Employing Minors in Violation of Labour Law: Employment of minors must strictly follow legal guidelines.

New Penalties for Fictitious Employment

A new provision has been introduced targeting fictitious recruitment. Employers involved in such practices will face penalties ranging from AED 100,000 to AED 1 million. The penalty will increase based on the number of fictitious employees recruited. Additionally, the Ministry of Human Resources and Emiratisation may bring criminal charges against companies found guilty of this violation.

What This Means for Employers

The UAE’s Labour Law amendments serve as a reminder for employers to review their current practices and ensure compliance with the updated regulations. This includes maintaining valid work permits, ensuring genuine recruitment, and settling employee entitlements in a timely manner.

Contact Us for Legal Support

If you need further guidance on how these changes could impact your business, our team at Fawzia Mohd. Lawyers & Legal Consultancy is here to help. Contact us for expert legal advice on ensuring compliance with the new UAE Labour Law amendments.