3 major changes to UAE Labour Law – all you need to know
Time to file labour cases increased to two years, heftier fines for violating companies
Dubai: The UAE has introduced amendments to its labour law, effective from August 31, 2024, aimed at strengthening labour regulations and protecting the rights of workers.
The new amendments are part of Federal Decree-Law No. 9 of 2024, issued on July 29, and come into effect from today.
Here are the key takeaways that you should know as a worker in the UAE’s private sector.
1. Statute of limitations for labour claims extended to two years
“Article 54 of the UAE Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (the UAE Labor Law) has undergone significant changes through Article 1 of Federal Decree-Law No. 20 of 2023 and subsequently through Article 1 of Federal Decree-Law No. 9 of 2024, the new decree,” Reda Hegazy, partner at Al Suwaidi and Company Advocates and Legal Consultants, told Gulf News.
One of these changes is the increase on the statute of limitations on labour cases.
“The statute of limitations for claiming labour rights under the UAE Labour Law has changed from one year from the date of entitlement of the right to two years from the date of termination of the employment relationship,” he said.
Hari Wadhwana, an associate at Dubai-based law firm OGH Legal, clarified that this extension can be used by both employers and employees.
“Article 54 (9) of the Labour Law now permits for either employer or employee to file a claim under the Labour Law with the time of up to two years from the date of termination of the employment relationship, which gives parties more time to assess their situation and then file a claim,” he said.
Article 54 (9) of the Labour Law now permits for either employer or employee to file a claim under the Labour Law with the time of up to two years from the date of termination of the employment relationship, which gives parties more time to assess their situation and then file a claim.
2. No appeal for cases under Dh50,000, file a case with Court of First Instance, instead
Since January 1, 2024, the Ministry of Human Resources and Emiratisation (MOHRE) has been handling labour cases with claims of up to Dh50,000.
“Article 54 (2) of the Labour Law confirms that MOHRE continues to have powers to hear, determine and issue decisions for all claims not exceeding Dh50,000 and these claims are immediately enforceable,” Wadhwana said.
But while earlier its decision could be appealed through the Court of Appeal, from August 31, this process will change.
“Lawsuits challenging the Ministry’s decision must now be filed with the Court of First Instance rather than the Court of Appeal. In the previous decree, Article 1 of Federal Decree-Law No. 20/2023, the Ministry's decision was appealable to the Court of Appeal within 15 working days. However, the new decree, amends Article 54 to allow any party involved in the dispute to file a lawsuit against the Ministry’s decision directly in the Court of First Instance. This represents a significant change, as it introduces a new legal process rather than an appeal, and importantly, the judgment of the Court of First Instance is final,” Hegazy said.
Explaining the new process, Wadhwana added that the lawsuit with the Court of First Instance must be filed within 15 working days from the date of notification of MOHRE’s decision.
“The Court of First Instance shall set a hearing within three working days with a judgement to be issued within 30 working days from the date of which the appeal was filed. Once this judgement is issued, no further appeals are permitted,” Wadhwana said.
• Any challenge must be filed with the Court of First Instance within 15 days of the judgement notification.
• Court of First Instance will set a hearing within three working days.
• Judgement to be issued within 30 working days from the date the appeal was filed.
• The judgement issued by the Court of First Instance is final.
What about pending labour cases?
Hegazy clarified that from August 31, as per Article 2 of the new decree, any pending requests, disputes, or grievances before the Court of Appeal will be transferred to the Court of First Instance without additional fees.
3. Increased fines for labour violations
The new law has also introduced heftier penalties for labour law violations. Under the previous law, fines ranged from Dh50,000 to Dh200,000 for offenses such as employing workers without permits, using work permits for unauthorised purposes, or closing establishments without settling worker rights. The amended law now sets fines between Dh100,000 and Dh1 million for these violations.
The new decree introduces a new provision in Article 60 (2), which imposes a fine between Dh100,000 and Dh1,000,000 on employers who circumvents the laws, regulations, or decisions governing the labour market and hires one or more workers in a fictitious manner.
“Moreover, the new decree introduces a new provision in Article 60 (2), which imposes a fine between Dh100,000 and Dh1,000,000 on employers who circumvents the laws, regulations, or decisions governing the labour market and hires one or more workers in a fictitious manner,” Hegazy said.
• Employing a worker who has not obtained a permit to work for him.
• Recruiting or employing a worker and leaving him without work.
• Using work permits for purposes other than those designated for their issuance.
• Closing an establishment or suspending its activities without taking the procedures for settling the rights of workers, in violation of the provisions of the UAE Labour Law and its implementing regulations and implementing decision.
• Employing a juvenile in violation of this UAE Labour Law.
• Agreeing to employ a juvenile in violation of this UAE Labour Law, who has guardianship or custody over the juvenile.
The new decree has increased these penalties significantly, ranging from Dh100,000 to Dh1 million.
Stricter regulation for fictitious hiring
Hegazy added that if such a violation resulted in the employer benefiting from a government entity, the Court will also order the employer to return the financial incentives, and the employer will also not have recourse to claim the financial incentives from the worker who was employed in a fictitious manner.
“This penalty is multiplied by the number of workers who were appointed in a fictitious manner,” he added.