Dubai Tightens Labour Laws with New Fines for Employers: What You Need to Know

The UAE Government has enacted a Federal Decree-Law amending certain provisions of the Federal Decree-Law concerning the Regulation of Employment Relationships, commonly referred to as the "UAE Labour Law."

The main objectives of this new decree-law are to balance labour relations by clearly outlining the rights and responsibilities of all parties involved.

It also aims to offer comprehensive protection for both workers and employers, ensuring they can exercise their rights within a well-defined legal framework.

New Laws

Strict Penalties for Unauthorised Employment Practices: Employers who engage workers without proper authorisation, misuse work permits, bring workers to Dubai without providing them with employment, or close their businesses without settling employee rights and pay, will be fined between Dh100,000 and Dh1 million.

Regulations to Protect Juvenile Workers: Any employer found hiring minors will face hefty fines. Employers who wilfully hire juveniles in violation of laws, such as those with guardianship or custody over the minors, will be subject to fines.

Additionally, employers are now required to settle workers' rights in accordance with the new Decree-Law and its regulations before closing facilities or ceasing operations.

The amendments specify that in the event of a labour dispute, if there is disagreement with a decision made by the Ministry of Human Resources and Emiratisation, the case should be brought before the Court of First Instance instead of the Court of Appeal.

Furthermore, the court will dismiss any claims filed more than two years after the termination of the employment relationship, in accordance with the provisions of the current law.

Why the Introduction of New Laws?

The UAE’s proactive approach to updating its labour laws underscores its dedication to fostering a fair and transparent work environment that protects the interests of both employers and employees.

These amendments are anticipated to further enhance the country's reputation as an attractive destination for skilled professionals and businesses seeking a well-regulated and robust labour market.

The decree also grants the Ministry the authority to resolve cases at the employer's request before a court ruling is issued, provided the employer pays at least 50 per cent of the minimum specified fine and reimburses the government for any financial incentives received by their fictitious employees.

Additionally, under the new decree-law, Courts of Appeal are required to transfer all ongoing requests, disputes, and grievances related to employment relations to the competent Court of First Instance from the date the decree-law takes effect, with the exception of disputes that have already been resolved or are awaiting judgment.

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