UAE Unveils New Decree Fostering Employment Relationship Regulations
In a significant move to refine and enhance various aspects of employment regulations, the United Arab Emirates (“UAE”) has introduced an amendment to the current employment legislation that regulates employment relationships by issuing Federal Decree-Law No. 9 of 2024 Amending some Provisions of Federal Decree-Law No. 33 of 2021 on Regulation of Employment Relationships (“New Decree”). This amendment is expected to bring significant changes to labour laws and more robust mechanisms for addressing labour disputes.
If you’re an employee or employer in the UAE, it’s wise to familiarise yourself with the New Decree to ensure compliance and understand how it might impact the work environment.
Key objectives of the New Decree generally focus on defining the rights and responsibilities of both employers and employees, developing a more transparent and fair working environment, leading to fewer disputes, and providing a better understanding of expectations on both sides.
The New Decree outlines stringent penalties for employers who violate labour laws, specifically employers who hire employees without the required permits, as they will face fines ranging from AED 100,000 to AED 1 million. Also, similar penalties will apply to employers hiring employees and bringing them to the UAE without providing them with a job, employers who misuse work permits, shut down their business or suspend operations without settling employees’ rights.
Additionally, the New Decree addressed the issue of minors being forced to work by their guardians in violation of the laws. This could be part of a broader effort to enforce labour laws more strictly and ensure the protection of minors in the workforce. The New Decree also addressed the issue of illegal employment of minors by setting financial penalties for employers who hire them.
According to the New Decree, if there is a labour dispute and a party disagrees with a decision issued by the Ministry of Human Resources and Emiratisation (“Ministry”), the next step is to bring the case to the Court of First Instance rather than the Court of Appeal. This indicates that initial disagreements must be addressed at the trial level before any appeal process.
The New Decree highlights the time limitation for labour claims. Courts will not accept claims filed more than two years after the termination of the employment relationship. This means that employees or employers have a two-year timeframe from the end of their relationship to file any legal claims related to the dispute.
The New Decree pointed out that criminal proceedings for fictitious employment, such as fraudulent Emiratisation, can only be initiated upon the request of the Minister of Human Resources and Emiratisation or his authorised representative. This means that the process for addressing such cases is centralised and requires the formal intervention of high-level officials. However, under the New Decree, the Ministry now has the authority to resolve such cases at the employer’s request before a court decision is made. For this settlement, the employer must pay at least 50% of the minimum fine and reimburse the government for any financial incentives received for fictitious employees.
Furthermore, starting from the date of the implementation of the provisions of this New Decree, disputes, applications, and grievances related to employment regulations currently at the Court of Appeal will be redirected to the competent Court of First Instance. This shift does not apply to cases already adjudicated or those awaiting a judgment.
These amendments are intended to create a more balanced and dynamic employment environment in the UAE, streamline the handling of employment disputes, ensure prompt resolution of labour cases and compliance with labour regulations, and protect employees’ rights.
