UAE introduces major changes to labour law: Key amendments effective from August 31
Dubai: The United Arab Emirates (UAE) has introduced significant amendments to its labour law, aimed at enhancing the protection of workers’ rights and tightening regulations for companies. These changes, which come into effect today, August 31, 2024, are part of Federal Decree-Law No. 9 of 2024, issued on July 29. The amendments address key areas such as the statute of limitations for labour claims, the appeals process for cases, and fines for labour law violations.
1. Statute of limitations for labour claims extended to two years
One of the most notable changes under the new decree is the extension of the statute of limitations for labour claims. Previously, under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), workers had one year from the date of entitlement to file a claim. However, this has now been extended to two years from the date of termination of the employment relationship.
Reda Hegazy, a partner at Al Suwaidi and Company Advocates and Legal Consultants, explained that this extension provides both employers and employees with more time to file claims related to labour rights. “This change reflects a significant shift in the legal framework, giving workers a longer period to seek redress for grievances,” Hegazy told Gulf News. The new law aims to ensure that workers have ample time to address any issues that may arise after their employment ends, thereby strengthening their legal protections.
2. new appeals process for cases under Dh50,000
Another major amendment involves the appeals process for labour cases involving claims of up to Dh50,000. Since January 1, 2024, the Ministry of Human Resources and Emiratisation (MOHRE) has handled these cases. Previously, decisions made by MOHRE could be appealed to the Court of Appeal within 15 working days. However, under the new decree, this process has changed.
Starting today, any lawsuits challenging MOHRE’s decisions must be filed directly with the Court of First Instance, rather than the Court of Appeal. “This change introduces a new legal process, as the judgement of the Court of First Instance will now be final and not subject to further appeals,” Hegazy noted. The Court of First Instance is required to set a hearing within three working days, with a judgement expected within 30 working days from the date of the lawsuit filing. This streamlined process is designed to expedite the resolution of labour disputes, ensuring quicker outcomes for all parties involved.
For cases that were pending before the Court of Appeal as of August 31, 2024, the new decree mandates that these will be transferred to the Court of First Instance without additional fees. This transition aims to bring all ongoing and future cases under the same legal framework, maintaining consistency in how labour disputes are handled.
More Read
3. Increased fines for labour violations
The third significant change introduced by the new decree involves harsher penalties for companies found in violation of labour laws. Under the previous law, fines ranged from Dh50,000 to Dh200,000 for offenses such as employing workers without proper permits or using work permits for unauthorized purposes. The amended law has significantly increased these fines, with penalties now ranging from Dh100,000 to Dh1 million.
Additionally, the new decree has introduced stricter regulations against fictitious hiring. Employers who engage in practices that circumvent labour laws, such as hiring workers in a fictitious manner to benefit from government incentives, will now face fines between Dh100,000 and Dh1 million. Moreover, if such a violation leads to financial gain from a government entity, the employer will be required to return the incentives. They will also be barred from claiming any financial incentives from the worker involved in the fictitious hiring.
Implications for workers and employers
These amendments reflect the UAE’s ongoing commitment to strengthening labour protections and ensuring fair treatment in the workplace. For workers, the extended statute of limitations and streamlined legal processes provide greater security and faster resolution of disputes. For employers, the increased fines and stricter regulations underscore the importance of compliance with labour laws.
As these changes take effect, both workers and employers in the UAE’s private sector will need to be aware of the new legal landscape and adjust their practices accordingly. The amendments are a clear signal that the UAE is prioritizing the rights of workers while holding companies accountable for their actions.
