Fines of Up to Dh1M: UAE Introduces Federal Decree-Law on Employment Relationship

The UAE Government on Monday announced fines of up to Dh1 million following the issuance of a Federal Decree-Law that amends specific provisions of the Federal Decree-Law on the Regulation of Employment Relationships.

Under the new provisions, employers may face fines ranging from Dh100,000 to Dh1 million under the following conditions:

* Employing a worker without a valid work permit or hiring them without providing a job.

* Closing a business without settling workers' rights.

* Engaging in fraudulent labour practices, including fictitious employment or fake Emiratisation.

* Employing a minor in breach of the law.

* Circumventing labour laws or regulations, including fictitious employment.
The penalties will increase based on the number of fictitious workers involved.

Additionally, the Ministry of Human Resources and Emiratisation is now empowered to offer a settlement option, requiring employers to pay 50 per cent of the minimum fine and reimburse the government for any financial incentives obtained through fake employees.

The decree specifies that criminal proceedings for fictitious employment, including fake Emiratisation, may only be initiated at the request of the Minister of Human Resources and Emiratisation or their authorised representative.

Furthermore, the decree mandates that disputes between employers and employees should be directed to the Court of First Instance rather than the Court of Appeal if there is a disagreement with the Ministry's decision in resolving the dispute.

This applies to all cases except those that have already been adjudicated or are awaiting judgment.
From the date of implementation, the Court of Appeal is required to refer all requests, disputes, and grievances concerning employment regulation to the Court of First Instance.

According to the new provisions, the court will dismiss any claims filed more than two years after the termination of the employment relationship.

This decree is part of the UAE's ongoing efforts to enhance its legislative and legal framework. It aims to improve the efficiency and competitiveness of the labour market, regulate employment relationships, and clearly define and protect the rights and obligations of all parties involved.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.