In a move reflecting the UAE’s commitment to a modern, dynamic workforce, the new amendments to Federal Decree-Law No. 33 of 2021 bring substantial changes to employment relations in the UAE. Federal Decree-Law No. 9 of 2024, issued under the directives of President His Highness Sheikh Mohamed bin Zayed Al Nahyan, introduces revised measures designed to enhance both employer and employee rights, streamline dispute resolution, and maintain a stable labour environment. These changes were introduced following consultations between the UAE Cabinet and the Ministry of Human Resources and Emiratisation (MOHRE).

Here’s a comprehensive breakdown of the key amendments:

1. Individual Labour Disputes: Simplified and Swift Resolution

The amendments introduce an enhanced framework for resolving individual labour disputes, as stipulated in Article 54 of the updated law. Under the revised process:

• Initial Mediation: If a dispute arises, either party can file a request with MOHRE. The Ministry will attempt to mediate the dispute amicably to facilitate a quick and efficient resolution.
• Direct Ministry Decision: MOHRE can directly resolve disputes where claims are valued at 50,000 AED or less. This measure ensures that minor claims are settled promptly, reducing the burden on the judicial system and avoiding prolonged legal procedures.
• Judicial Escalation: For unresolved disputes, the law provides a structured path for appealing MOHRE’s decision to the competent primary court. The court is required to schedule hearings within three working days of the appeal and issue a decision within 30 working days. This structured approach guarantees that labour disputes are resolved in a timely manner, promoting transparency and reliability for both parties involved.

2. Interim Wage Protection

An innovative provision allows MOHRE to mandate employers to continue paying a worker’s wages for up to two months if the dispute halts the worker’s wage flow. This intervention, subject to specific executive regulations, aims to prevent financial hardship for employees whose wages are interrupted due to unresolved employment disputes.

3. Strengthening Compliance: New Penalties for Employment Violations

Significant revisions in Article 60 introduce a new spectrum of penalties, aimed at deterring violations and promoting lawful employment practices:

• Hefty Fines for Unlawful Employment Practices: Employers may face fines ranging from 100,000 AED to 1,000,000 AED for employing workers without appropriate authorization, neglecting workers after recruitment, using work permits improperly, or closing down businesses without settling worker dues.
• Sanctions on Employment Fraud: Employers attempting to exploit the system by hiring workers fraudulently or creating ‘phantom’ positions to claim benefits unlawfully may face severe financial penalties. Courts have the authority to mandate reimbursement of any unlawfully obtained benefits, discouraging practices that undermine fair competition and harm legitimate employees.
• Prohibition on Retaliation: If the employer unlawfully secures financial benefits for the worker, courts will enforce reimbursement of any illicit financial incentives to relevant government bodies, without allowing the employer to recover these costs from the employee.

4. Encouraging Settlement in Criminal Offenses

MOHRE has the authority to offer settlement options in cases involving fraudulent employment practices before a final court decision is issued. A settlement requires the employer to pay at least 50% of the minimum fine and return all financial incentives unlawfully obtained by employees through the fraudulent scheme. This measure encourages timely resolution and allows employers to mitigate potential legal consequences through settlement.

5. Clarifications on Judicial Authority and Procedural Transitions

Amendments in Article 54 also streamline the jurisdictional authority of primary and appellate courts, particularly concerning minor labour disputes. Primary courts are now the designated venue for disputes under specific monetary thresholds. Notably:

• Transfer of Cases: All pending cases related to minor disputes will automatically be transferred to primary courts without additional fees, ensuring a uniform approach to minor dispute handling. However, this transition excludes cases that have already reached judgment or are pending judgment.

6. Safeguarding Worker Rights: Limitation on Claims

The amendments impose a statute of limitations on labour claims, stipulating that claims must be filed within two years of the employment relationship’s end. This provision ensures that claims are raised within a reasonable time frame, supporting the timely resolution and minimizing complications related to the passage of time.

Final Reflections

Federal Decree-Law No. 9 of 2024 emphasizes the UAE’s commitment to a fair, regulated, and efficient labour market. By refining dispute resolution processes, imposing stringent penalties on employment malpractices, and ensuring fair treatment for both employers and employees, the UAE continues to fortify its labour laws in alignment with global standards. The amendments reflect a forward-looking approach, balancing the rights and obligations of employers and employees while fostering a stable and competitive business environment.

For employers, these updates underscore the importance of compliance and transparent labour practices. For employees, they reinforce the UAE’s dedication to protecting their rights, promoting fair treatment, and offering efficient recourse in disputes. These amendments thus enhance trust, stability, and fairness within the UAE’s labour landscape, reflecting the nation’s broader objectives of legal reform and workforce development.

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