UAE Labour Law Amendments: Up to AED 1 Million Fine for Employment Violations

Up to AED 1 Million Fine for Employment Violations

The UAE Government has introduced substantial amendments to the Federal Decree-Law on the Regulation of Employment Relationships, imposing stringent fines of up to AED 1 million for several serious violations. These changes aim to enhance the efficiency and competitiveness of the labour market while clearly defining the rights and obligations of all parties involved.

Key Violations and Penalties

Under the new provisions, employers may face fines ranging from AED 100,000 to AED 1 million for the following infractions:

1. Employing a Worker without a Permit

This includes hiring individuals without the proper work permits or bringing them into the country without providing a legitimate job.

2. Closing a Business without Settling Workers' Rights

Employers who close their businesses without fulfilling their obligations to their workers will face significant fines.

3. Fraudulent Labour Practices

Engaging in activities such as fictitious employment or fake Emiratisation schemes will attract severe penalties.

4. Employing Minors in Violation of the Law

Any employer found to be hiring minors contrary to UAE labour laws will be penalized.

5. Circumvention of Labour Market Regulations

Any attempts to bypass the laws governing the labour market, including fictitious employment practices, will result in heavy fines.

The fines are designed to multiply based on the number of workers involved in fictitious employment, amplifying the penalties for larger-scale violations.

Authorisation for Settlements

The Ministry of Human Resources and Emiratisation (MOHRE) is now empowered to settle violations, provided that the employer pays 50% of the minimum fine and reimburses the government for any financial incentives obtained through fraudulent activities.

Legal Proceedings and Dispute Resolution

The new decree also stipulates that criminal proceedings for fictitious employment can only be initiated at the request of the Minister of Human Resources and Emiratisation or their authorized representative. Moreover, disputes between employers and employees will now be referred directly to the Court of First Instance, except in cases specifically reserved for the Court of Appeal.

Time Limits for Filing Claims

Claims related to employment disputes must be filed within two years from the termination of the employment relationship. Any claims made after this period will not be considered by the courts.

How Al Kabban & Associates Can Assist

Navigating these new legal requirements can be complex and challenging for businesses. At Al Kabban & Associates, we offer comprehensive legal services to ensure your business is fully compliant with the latest UAE labour laws. Our experienced team is equipped to handle everything from legal consultations to dispute resolution, helping you avoid hefty fines and ensuring that your operations remain within the bounds of the law.

Whether you need assistance with drafting employment contracts, resolving labour disputes, or understanding the implications of these new amendments, Al Kabban & Associates is here to guide you every step of the way.

Conclusion

This decree is part of the UAE’s ongoing efforts to refine its legislative framework, ensuring that the labour market operates with greater transparency, efficiency, and fairness. Employers are urged to comply with these new regulations to avoid hefty fines and legal complications. Contact Al Kabban & Associates today to ensure your business stays compliant with these crucial legal updates.

Contact Al Kabban & Associates at +97144539090 or email info@alkabban.com to speak to one of our many specialist lawyers who can assist you with all matters related to the UAE Labour Law.

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