Dubai Court Slashes Dh1.2 Million Labour Fine to Dh60,000 on Appeal

Dubai court has reduced a labour law penalty from Dh1.2 million to Dh60,000 after partially accepting an appeal in a case involving a company manager convicted over the handling of 12 sponsored workers.

In a ruling issued on May 12, 2026, the Dubai Court of Appeal upheld the conviction but exercised judicial discretion to significantly reduce the fine from Dh100,000 per worker to Dh5,000 per worker, bringing the total penalty down to Dh60,000.

The case arose after authorities alleged that a Dubai-based technical services company had ceased operations without completing the required legal procedures to regularise the status of employees sponsored under the firm. Labour inspectors concluded during a March 7, 2025 inspection that the establishment appeared to be non-operational, prompting prosecution under Federal Decree-Law No. 33 of 2021 regulating labour relations.

A misdemeanour court had earlier imposed the maximum penalty permitted, issuing a fine of Dh100,000 for each of the 12 workers involved. Prosecutors argued that the company had effectively stopped operating and failed in its obligations towards its employees after halting business activities.

On appeal, the defence challenged the findings, arguing that the prosecution had not established the essential elements of the offence. It was submitted that the company had not permanently shut down and that the inspectors’ conclusions were based on limited observations, including a locked office, unanswered calls and absence of signage, without deeper verification of operational activity.

The defence maintained that the company operated in the technical services sector, where employees are frequently deployed to external project sites rather than remaining at office premises. It was further argued that all 12 workers were assigned to an active project in Abu Dhabi at the time of inspection, explaining the absence of staff at the office.

Documents were also submitted showing that the company’s trade licence remained valid until November 2025, while the office lease had been renewed until October 2026.

Wage Protection System records for February 2025 were presented to demonstrate that salaries for all employees continued to be paid even after the inspection period. The defence argued that continued salary payments and fulfilment of labour obligations were inconsistent with any claim of abandonment or closure.

It was further contended that there was no evidence of criminal intent to abandon workers or evade legal responsibilities. It was also noted that none of the employees had filed complaints with the relevant labour authorities regarding unpaid wages, labour violations or residency issues.

The appeal also questioned the investigation process and sought to introduce additional witness testimony, including individuals associated with the building where the office was located. It was argued that maintenance activity had been ongoing and that the premises had not been abandoned, as suggested by a building receptionist.

The court, however, declined requests to summon additional witnesses, stating that the technical reports and evidence already on record were sufficient for adjudication.

While upholding the conviction, the Court of Appeal acknowledged mitigating circumstances presented in the appeal. Invoking Articles 100/1 and 101 of the UAE Crimes and Penalties Law, it exercised judicial discretion to substantially reduce the penalty, lowering the total fine to Dh60,000.

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