Penalties Up to AED 1 Million: Major Changes in Federal Decree-Law No. 33 of 2021:
The UAE government has announced today, 12th of August 2024, amendments to certain labor law provisions. These amendments are part of the ongoing development of the UAE’s legislative framework, aimed at improving labor market efficiency, enhancing competitiveness, regulating labor relations, and ensuring balanced protection of the rights and obligations of all parties involved.
Following are the main changes,
Penalty Increased to AED 1 Million from AED 200,000
The government has amended Article 60 of Federal Decree-Law No. 33 of 2021, increasing fines from AED 50,000 – AED 200,000 to AED 100,000 – AED 1,000,000 for the following violations:
- Employing a worker without a valid work permit.
- Recruiting a worker and leaving them without work.
- Misusing work permits for unauthorized purposes.
- Closing an establishment without settling workers’ rights.
- Employing a juvenile against the law.
- Allowing the employment of a juvenile by their guardian or custodian violates the law.
Fake Employment and Emiratisation
The decree-law introduces a criminal penalty for fake employment, including fake Emiratization, with fines ranging from AED 100,000 to AED 1,000,000 for any employer who circumvents the laws, regulations, or decisions regulating the labor market and increases workforce competitiveness by hiring one or more workers under pretenses. The penalty shall be multiplied according to the number of workers who have been falsely employed.
Court Jurisdiction Shift from Appellate to First Instance
The amendments now require that any disagreement with MOHRE’s decision on a labor dispute be brought before the First Instance court, rather than the appellate court.
The new decree-law mandates that all pending labor-related requests, disputes, and grievances in appellate courts will be transferred to the appropriate primary court, except where a judgment has already been issued or is pending.
Statute of Limitations Extended from One Year to Two Years
The amendments extend the statute of limitations for labor claims under the decree law to two years from the date of termination of the employment relationship.
Criminal proceedings and settlement
The new decree-law states that criminal proceedings for fake employment may only begin at the request of the Minister of Human Resources and Emiratisation or their representative. The ministry can settle with the employer before a judgment, requiring payment of at least 50% of the minimum fine and the return of any financial benefits to falsely employed workers. Settlement payment leads to the dismissal of the criminal case.
