The recent amendments to the UAE Labour Law, introduced under Federal Decree-Law No. 9 of 2024, have significantly heightened penalties for employer violations, aiming to enhance employee protections and ensure stricter compliance with labour regulations.
1. How have the penalties changed? What were the
offenses and penalties earlier, and how have they changed
now?
Under the previous Article 60 of the UAE Labour Law, penalties for
employers' violations ranged from AED 50,000 to AED 200,000
and the offenses included:
- Employing workers who did not have the appropriate authorisation or licensing to work for them.
- Recruiting or employing workers and then leaving them without work.
- Misusing work permits for purposes other than those for which they were issued.
- Closing down a company or suspending its activities without settling workers' rights or entitlements.
- Employing minors in violation of the Labour Law's provisions.
Agreeing to employ minors, in violation of the provisions of the
Labour Law, who have guardianship or tutorship over them.
The amendments introduced under Federal Decree-Law No. 9 of 2024
have significantly increased the penalties for the aforementioned
violations, with fines now ranging from AED 100,000 to AED
1,000,000. In addition to increasing the fines, the amendments have
introduced new provisions specifically addressing fictitious
employment practices. Offenses involving fictitious employment now
attract severe fines within the same range, with the penalty
multiplied based on the number of workers involved. This is
designed to directly address and deter the practice of falsely
employing individuals to claim benefits or evade legal obligations.
Furthermore, employers are now required to reimburse the government
for any financial incentives improperly obtained through such
practices. This can be considered a rigorous measure to ensure that
government programs, such as the Emiratisation program, are
properly implemented and to prevent employers from attempting to
circumvent related laws and regulations
2. What do the changes mean for both employers and
employees?
The amendments create a stricter regulatory environment for
employers, demanding greater compliance with the Labour Law. The
substantial increase in fines, along with the possibility of
criminal penalties, serves as a strong deterrent against
non-compliance to the Labour Law. The amendments make it clear that
any violation of labour regulations will result in severe
consequences, thereby increasing employer accountability.
For employees, these changes offer enhanced protection and
security. The higher penalties imposed on employers provide a
stronger deterrent against violations of employee rights, making it
less likely that employees will face illegal or unfair treatment.
Additionally, provisions such as extending the time-bar for filing
employment claims and ensuring continued wage payments during
disputes further strengthen employee protections.
The new amendments, particularly those concerning small employment
claims and the involvement of the Ministry of Human Resources and
Emiratisation (MOHRE), also ensure a more
efficient, equitable, and streamlined legal process for both
employees and employers.
3. How does it protect employees and their
rights?
The amendments to the UAE Labour Law significantly bolster the
protection of employees' rights in several ways:
- By significantly increasing fines and reinforcing the criminal liability of employers for violations, the law dissuades employers from engaging in practices that could be detrimental to employees.
- Extending the time-bar for bringing employment claims from one year to two years after the termination of employment protects employees' interests and rights, giving them more time to claim their unpaid dues.
- The Ministry's enhanced role in mediating disputes and its ability to issue enforceable decisions in low-value claims and disputes over non-compliance with employment settlement agreements concluded through MOHRE ensure that employment disputes can be resolved more swiftly and efficiently with less legal costs.
- The Labour Law also protects employees' financial stability by authorising the Ministry to instruct employers to continue wage payments during the dispute process, up to two months if their wages have been suspended.
Published on 16 August, 2024.
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