Up to Dh1 million fine: UAE issues new law to normalize employee relations

The UAE Government on Monday declared fines of up to Dh1m, following the issuance of the Federal Decree-Law that brings modifications to the Federal Decree-Law regulating Employment Relations.

Under the new requirements, a fine ranging from Dh100,000 to Dh1 million will be inflicted on employers for the following breaches:

• Hiring a worker without a work permit or securing a worker without the intention of offering employment to them.
• This means that a business can be closed without any legal obligations to meet workers’ rights.
• Being involved in fake labor practices that include fake employment or fake Emiratization.
• It is unlawful to practice a minor in the employment of that which has been barred by law
• Assuming any action or position that violates the laws or regulations that protect the labor market and employment, including assuming a fictitious job.
• According to new provisions it has been introduced that the penalties would increase with an incremented number of workers who have been fictitiously employed.

Furthermore, Now, The Ministry of Human Resources and Emiratization can make a settlement with the employer With an understanding that the employer shall be penalized with fifty percent of the minimum value of the fine, and the employer shall also refund the government the financial incentives given to the fake employees.

In the case of fiction employment especially in Emiratization, the new decree states that no criminal proceedings can be commenced until it has been requested by the Minister of Human Resource and Emiratization or his/her agent.

In the same decree, the Court of First Instance — as opposed to what we would find in the Court of Appeal — should hear any disagreements with the Ministry of Human Resources and Emiratization regarding the resolution of the dispute between the employer and employee. This applies to all events apart but for those cases which have been settled or those which have been termed for a judgment.

Since the provisions entered into force with the provisions coming into force, any requests, disputes, and complaints regarding the regulation of employment relations are appointed by the court of appeal to the Court of First Instance.

According to the new rules, the court shall dismiss proceeding further any actions with the help of the claim submitted later than two years from the date of the termination of the employment contract.

This means that it forms a part of the legal and legislative framework development in the country which is in its progressive stage. It seeks to guarantee an effective and sustainable market for labor, promote and correct employment relations, as well as outline comprehensive rights and roles of their occupants with necessary legal protection.