On 29 July the UAE government announced amendments to the country’s labour law. The new amendments are part of Federal Decree-Law No. 9 of 2024 and come into effect from 31 August 2024.
UAE labour law is fundamental when it comes to regulating the relationship between employers and employees, aiming to balance the rights of both parties and to ensure a safe and healthy working environment.
Given the rapid economic and social changes that continue apace in the UAE, there has been a pressing need to update these laws for some time to meet the demands and challenges as the country continues to advance and align with international best practices. The recent amendments to the labour law are a response to these changes as they seek to protect employee rights, improve working conditions, and introduce necessary flexibility to the labour market to align with the country’s advanced economy.
In this article, we will explore the most significant recent changes introduced to the UAE labour law, particularly focusing on the amendments to Article 54 and Article 60 as follows:
Article 54 Amendments:
1. Legally Enforceable Decisions by the Ministry of Human Resources and Emiratisation (MOHRE):
The Ministry of Human Resources and Emiratisation has undergone a pivotal transformation in relation to the role it plays in labour disputes. Now, the Ministry's decisions are legally enforceable through an "Execution Order," which acts as a court order enabling the execution of the Ministry's rulings.
2. Right to Appeal MOHRE Decisions:
Parties involved in a dispute can appeal the MOHRE decision before the Court of Appeal (which serves as the first instance court) within 15 working days from the date they were notified of the Ministry's decision. The Court of Appeal's ruling is final, and the appeal suspends the enforcement of the Ministry's decision as stipulated in Article 1 of the New Law.
3. Cap on Claims in Labour Disputes:
The amended law sets a cap on the claim amount in labour disputes. MOHRE has been given the authority to make binding decisions in disputes where the claim value does not exceed AED 50,000. For disputes exceeding this amount, the Ministry continues to act as a mediator and refers the matter to the court if an amicable settlement is not reached.
4. Statute of Limitations in Labour Claims:
A two-year statute of limitations has been established for labour dispute claims, starting from the date the claim becomes due. After this period, the right to file a claim is lost, regardless of the merit of the claim. Previously, the time-bar for hearing any legal action concerning employment rights was one year from the date of entitlement of the employment dues.
5. Continuation of Salary Payments During Disputes:
In cases where labour disputes lead to the suspension of an employee’s salary, the Ministry may oblige the employer to continue paying the employee’s salary for up to two months during the dispute period. If no settlement is reached within 14 days, the Ministry will refer the dispute, along with a summary and recommendations, to the competent court.
Article 60 Amendments:
These amendments relate to increasing the minimum and maximum fines imposed on employers, with the minimum raised to AED 100,000 and the maximum to AED 1,000,000, replacing the previous limits of AED 50,000 and AED 200,000, respectively. These fines apply to the following violations:
1. Employing a worker who is not authorised to work for them.
2. Recruiting or employing a worker and leaving them without work.
3. Using work permits for purposes other than those for which they were issued.
4. Closing a business or suspending its activities without taking steps to settle workers' rights in contravention of the provisions of this decree-law, its executive regulations, and the decisions issued in its implementation.
5. Employing a minor in violation of the provisions of this decree-law.
6. Agreeing to the employment of a minor in violation of the provisions of this decree-law by those with guardianship or custody over the minor.
Conclusion
The UAE is one of the fastest-growing economies, providing a global platform for businesses. The 2024 amendments to the UAE labour law demonstrate the country’s proactive approach to enhancing its labour laws and represent a significant step toward further modernising policies, enhancing worker protection, offering greater flexibility to working arrangements and conditions, and creating a fair and transparent work environment that protects the interests of both employers and employees.
The updates demonstrate the UAE’s commitment to fostering a competitive and dynamic labour market, allowing businesses to adapt to changes in labour law, ensuring compliance, and benefiting from a fair and transparent work environment. They will further strengthen the country’s position as a preferred destination for skilled professionals and businesses seeking a robust and well-regulated labour market.
Horizons & Co's Employment Law
Horizons & Co. is considered a market leader in providing comprehensive employment law advice to local, regional and international clients operating in the UAE. Our extensive experience in handling employment issues, both contentious and non-contentious means we are the firm of choice for successfully supporting clients on the full range of employment matters, ranging from advising on creating policies and procedures and advising on contracts and compensation, to internal investigations and highly sensitive disputes encompassing issues ranging from unfair dismissal to discrimination.
We have successfully represented numerous clients in complex cases, ensuring their rights are protected throughout the process and their commercial aims met. With a deep understanding of both the legal and reputational nuances involved, we are equipped to assist individuals and organisations dealing with employment and labour related issues, offering comprehensive support at every stage.
Authors:
Dr. Mohamed Mahrous
Partner
Contact number: +971 50 696 3065
and
Alaa Morad
Legal Consultant